deed of assignment of a commercial lease

Navigating the assignment of a commercial lease

Special circumstances can require a tenant or a landlord to assign a commercial lease. Find out the most common situations for a commercial lease assignment and whether it's right for your situation.

Find out more about real estate and business

by   Ronna L. DeLoe, Esq.

Ronna L. DeLoe is a freelance writer and a published author who has written hundreds of legal articles. She does...

Read more...

Updated on: January 9, 2024 · 3min read

• Tenant's assignment of a commercial lease
• Getting the landlord's consent
• Contents of a tenant's assignment agreement
• Landlord's assignment of a commercial lease

If you're running a business, you may find yourself in a situation where you need to break a commercial lease. As a tenant, one option is to assign the lease, which means removing yourself completely from the lease and transferring it to a third party.

There are also instances when a landlord may need to assign a commercial lease, such as when a property is sold. In doing so, you sell the building with any leases intact, which requires assigning your right to collect rent to the new owner.

Tenant's assignment of a commercial lease

There are many reasons a tenant may want to get out of a commercial lease, including not being able to afford the rent and needing less or more space. Because it's unlikely a landlord will simply let you walk away from your commitment, you should check what your lease says about early termination. Most commercial leases require the tenant to pay rent for the rest of the term and possibly additional fees for breaking the lease.

Assignment of the lease is another alternative to breaking it. In doing so, you give the new tenant, known as the assignee, the right to occupy the premises in your place for the remainder of your lease term.

Getting the landlord's consent

Almost all assignments of commercial leases by the tenant need the landlord's consent, so check your original lease for any such language. As with a residential lease, a landlord cannot unreasonably withhold consent for you to assign the lease. However, it's up to you as the assignor, or original tenant, to ensure that your assignee is reliable, responsible, and can pay the rent—or you may end up being held financially liable.

If the tenant assigns a commercial lease to a new tenant without the landlord's permission, the landlord can sue the original tenant for breaking the lease. The landlord can also collect damages against one or both tenants if he can show that the assignee isn't a good-paying tenant or doesn't have the type of business he wants in the building. He can also end the lease and evict the new tenant.

Contents of a tenant's assignment agreement

Assignment of a commercial lease is almost always accompanied by a written agreement to preserve both the tenant's and landlord's rights. Some states require written assignment agreements . Many commercial assignment agreements contain provisions for the:

• Payment of fees to the landlord for having another business substitute for yours
• Assignor's and assignee's names, addresses, and business names
• Landlord's name, address, and business name
• Amount of the new tenant's rent and the dates for payment
• Date of the agreement
• Date the assignment is effective
• Date the lease ends
• The landlord's, assignor's, and assignee's signatures

Assignment agreements usually don't contain a provision releasing the assignor from paying rent, meaning that you, as the assignor, are held responsible for payment. Even so, assignment can be a financially responsible option for a tenant who's going out of business or who needs new space immediately.

Landlord's assignment of a commercial lease

Sometimes a commercial landlord needs to sell his property. After the new owner, or assignee-buyer, buys the property subject to existing leases, the assignor-landlord assigns the leases to the new owner, who can then collect rent. The assignor-landlord notifies tenants by sending a notice of sale, a notice of assignment of lease, or a notification on letterhead listing the assignee-buyer's address for payment of rent.

Unless the lease states otherwise, you, as landlord, can sell your property to anyone, but make sure to get a hold harmless clause , also known as an indemnity clause, in your contract of sale. Such clauses protect you from liability to the tenant if the buyer doesn't perform her duties as a landlord. Otherwise, as the original landlord, you're still liable for your obligations to the tenant, such as keeping the premises habitable.

Under the right circumstances, assignment of a commercial lease can work for both landlords and tenants. If you need assistance with your assignment agreement, consider using an online service provider to prepare it for you.

You may also like

What does 'inc.' mean in a company name?

'Inc.' in a company name means the business is incorporated, but what does that entail, exactly? Here's everything you need to know about incorporating your business.

October 9, 2023 · 10min read

How to start an LLC in 7 steps: A complete guide for 2024

It's easy to create a new LLC by filing paperwork with the state. But to set yourself up for success, you'll also need to think about your business name, finances, an operating agreement, and licenses and permits. Here's a step-by-step guide.

March 21, 2024 · 20min read

How Do You Assign or Transfer a Commercial Lease?

By Jessica Dinh Lawyer

Updated on December 15, 2023 Reading time: 5 minutes

This article meets our strict editorial principles. Our lawyers, experienced writers and legally trained editorial team put every effort into ensuring the information published on our website is accurate. We encourage you to seek independent legal advice. Learn more .

• 1. Seek Your Landlord’s Consent 

2. Deed of Assignment

3. transferring a retail lease, key takeaways.

If you lease a commercial property to operate your business, there may be situations where you need to transfer the lease. There are usually two situations when a tenant will transfer (also known as an assignment ) a commercial lease to another party (the assignee) before the end of a lease term. Namely, where the tenant is:

• selling their business, and the purchaser agrees to accept the existing lease rather than enter into a new lease with the landlord; or
• is proposing to exit the lease and has found a party who will take on the existing lease.

This article explains how the transfer of a commercial lease works. It also explains the critical terms of the deed of assignment from the perspective of the landlord, tenant and assignee.

1. Seek Your Landlord’s Consent 

As soon as you propose an assignment as a tenant, you should:

• review the existing lease to identify if the lease can be assigned;
• identify the requirements of landlord’s consent upon assignment; and
• correspond with the landlord or agent as to consent and approval of the proposed assignee under the lease. 

When seeking your landlord’s consent for the assignment, the proposed new tenant must usually provide their financial and business references to the landlord.

Can a Landlord Refuse to Assign a Retail Lease? 

If the lease is a retail lease, the landlord will not be able to withhold consent to an assignment unreasonably. The retail legislation (different in each state) provides the grounds on which the landlord can withhold their consent. These generally include the:

• assignee proposes to change the permitted use;
• assignee has financial resources or retailing skills that are inferior to the assignor, and
• assignor has not complied with the relevant steps, per the retail legislation in that particular state, including providing a disclosure statement.

Ensure that you check the retail legislation in that particular state when carrying out an assignment.

After obtaining the landlord’s consent, a deed of consent to assignment is prepared (deed of consent).

A deed of consent is a legal document that outlines that the:

• landlord confirms their consent to the transfer of lease;
• tenant agrees to transfer their entire interest in the lease to the assignee from a specific date (the assignment date); and
• assignee, or new tenant, agrees to assume the rights and obligations of the lease as if they were the original tenant (such as repairs, security and payment of rent and outgoings) from the assignment date. This will continue until the end of the lease term and during any option or renewal terms.

The Landlord

Generally, the landlord’s key concern is that the transfer does not affect their rights under the lease. The landlord can address this concern by ensuring that the original tenant (assignor) has complied with all of their obligations under the lease until the assignment date. The landlord will have the right to take action against the tenant after the assignment date for any existing breach of the lease. 

Additionally, the landlord will want to make sure that the assignee can comply with the lease obligations. This will often involve an assessment of the assignee as a tenant. The landlord will thoroughly examine the information before confirming their consent to the transfer. This might include: 

• financial statements; 
• business history; and 
• professional references. 

Finally, there is usually an agreement about who is liable for the costs of the deed of assignment. The landlord’s lawyer usually prepares the agreement. However, the outgoing tenant or the incoming tenant pays these costs, not the landlord.

The deed of assignment usually requires the assignee to give the relevant security and guarantees.

The Outgoing Tenant

As the outgoing tenant, your key concern is to be released from your obligations under the lease from the assignment date. The deed of assignment can address this concern by specifying that:

• the tenant is released from any claims or liabilities under the lease from the assignment date (provided that there is not an existing breach of the lease); and
• if the tenant has provided any security, it is to be returned or refunded.

It is important for you to remember that you are bound to the terms of the lease until the transfer of the commercial lease is formalised through the deed of assignment. Accordingly, you should continue to comply with your obligations under the lease until the assignment date.

On that note, a landlord might not agree to release you entirely from your obligations if the retail legislation in your state does not prevent this. This means that if the new tenant defaults, you could be responsible for fulfilling the lease obligations. In that case, you would need guarantees or an indemnity from the new tenant.

If the transfer of deed has to be registered, typically with retail leases, you (the assignor) usually organise the registration of the transfer, whose costs are divided with the new tenant  (the assignee).

The Assignee

The new tenant’s, or the assignee’s, key concern is for the landlord to accept the transfer of the commercial lease from the assignment date. The deed of assignment can address this concern by providing that:

• the landlord accepts the assignee as tenant from the assignment date;
• the landlord will observe their obligations specified in the lease in favour of the assignee; and
• if required in the relevant state, the parties sign a transfer of lease form and register the transfer at the land titles office.

The assignee should ensure that they have reviewed the contents of the commercial lease (including the disclosure statement if it is a retail lease). Then, they must review the lease before signing the deed of assignment. This is because the assignee will need to comply with the obligations of the tenant from the assignment date. These obligations may include the provision of security and a personal guarantee.

A personal guarantee is taken on by an individual to guarantee the obligations of another individual or entity. For example, the assignee providing may provide a personal guarantee where a particular party becomes a guarantor. If you cannot meet your obligations (such as to pay the lease), then the guarantor will have to meet that obligation themselves.

Before finalising the deed of assignment, it is important that the landlord, assignor and assignee agree on who bears the costs of preparing, negotiating and registering the deed of assignment. Generally, you, as the assignee, will bear the costs. However, you may choose to add a cap or exclude negotiation costs. 

If the lease you are transferring is a retail lease, the tenant will typically need to give the assignee a disclosure statement. This statement also includes details of any changes to the disclosure statement that the landlord provided when the lease was first entered into.

The disclosure statement outlines the vital information that the assignee needs to know, including the:

• current annual rent under the lease;
• current estimated outgoings payable under the lease;
• term of the lease and any options to renew; and
• details of the premises. 

Generally, the tenant may request an updated disclosure statement from the landlord before the transfer of the commercial lease. The landlord has an obligation to provide the updated disclosure statement, usually within 14 days from the date of the request.

The disclosure statement requirements differ between the states and territories. For example, in:

• New South Wales, the assignee must receive the disclosure statement at least seven days before the date of the transfer; and
• Victoria and Queensland, the assignee must receive the disclosure statement at least seven days before the assignor requests the landlord’s consent.

The consequences of failing to provide a disclosure statement also differ between the states and territories. For example, the assignee may:

• withhold payment of rent;
• seek compensation from the landlord; or
• terminate the lease within a specific timeframe.

It is essential for all parties to be aware of the requirements and consequences of the disclosure statement provisions in their particular state or territory.

Additionally, transferring a lease may also lead to stamp duty implications . Stamp duty is a tax imposed on the purchase of assets and transactions of property. Therefore, if you are transferring a lease, you will commonly have to pay stamp duty. It is important that you are aware of the circumstances where you, as a tenant, will be required to pay stamp duty.

A factsheet that sets out the three ways to end a commercial lease in Australia: surrendering your lease, assigning it or subletting it.

Whether you are a landlord, tenant or assignee, it is crucial that you understand your rights and obligations when transferring a commercial lease. Further, the transfer of a retail lease leads to additional requirements and consequences related to the disclosure statement. Finally, you need to be aware of the steps you should take to ensure a smooth assignment.

If you need assistance with drafting or reviewing the terms of a deed of assignment, our experienced leasing lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page .

We appreciate your feedback – your submission has been successfully received.

Register for our free webinars

‘closing loopholes’ law changes: what every employer needs to know, effective strategies for managing non-compliant franchisees, ai in business: mastering compliance and mitigating risks, preventing sexual and gender-based harassment: your whs legal duties, contact us now.

Fill out the form and we will contact you within one business day

Related articles

Deadlines for the Option to Renew a Lease in NSW

10 Things a Tenant Should Know Before Signing a Lease

How Will the Changes to the Retail Leases Act 1994 (NSW) Affect My Business?

I’m Selling a Business. How Do I Transfer the Lease?

We’re an award-winning law firm

2023 Fast Firms - Australasian Lawyer

2022 Law Firm of the Year - Australasian Law Awards

2021 Law Firm of the Year - Australasian Law Awards

2020 Excellence in Technology & Innovation Finalist - Australasian Law Awards

2020 Employer of Choice Winner - Australasian Lawyer

.

• About Office News
• Office Help
• Offices.net Scholarships
• Offices.Net Home

A Full Guide to Commercial Lease Assignment (Lease Transfer)

Dealing with a fixed-term lease agreement and looking to move offices or downsize? The topic of commercial lease transfer can be confusing to navigate, particularly when you are unsure of your rights and obligations under the lease.

If you’re renting a commercial property, you signed a contract at the beginning of your tenancy called a lease agreement , which contains all the details of your rights and obligations while occupying and conducting business operations at the commercial property. Your agent is required by law to give you a copy of the lease agreement if you don’t already have one.

The following article will serve as a full guide to commercial lease assignment, providing business owners with an overview of the legal considerations and elements required for an assignment of lease.

• 1 What is a Commercial Lease Assignment?
• 2 Current Market Conditions Boosting Lease Transfers and Flexible Arrangements
• 3 What is the Difference Between Commercial Lease Assignment and Subleasing?
• 4 Why Would You Want to Transfer a Lease?
• 5 How to Go About Transferring Your Commercial Lease
• 6.1 Goals and obligations of the original lessee and new tenant
• 6.2 Starting date of lease assignment
• 6.3 Pitfalls and consequences
• 7.0.1 Further Insights

What is a Commercial Lease Assignment?

Also known as a lease transfer, a commercial lease assignment involves a tenant transferring all of their interests and rights in a lease to a new party. This new tenant will take on the responsibilities of the existing lease, including rent and any other obligations, leaving the original tenant free to exit the agreement.

Commercial lease assignment often occurs when tenants want to leave their commercial property prior to the end of a fixed-term agreement. This often happens when a business quickly needs to upsize or downsize their space, move to a new city, or go out of business.

State law dictates whether tenants require their landlord’s consent prior to transferring a lease or subletting a part of their space. However, most lease agreements will clearly outline full transfer provisions prior to being signed and, whilst it is possible for lease assignment to be forbidden, the vast majority of agreements allow for transfers.

Current Market Conditions Boosting Lease Transfers and Flexible Arrangements

There has been a marked increase in the number of lease transfers and sublets of commercial properties in recent years, largely as a result of increased instances of remote work and downsizing seen across multiple industries. This reduced need for workspace has persisted, as many workers have continued to show a preference for remote and hybrid work arrangements if and when suitable.

Changing employee priorities have forced many businesses to reconsider their existing lease agreements, resulting in an increase in both commercial lease assignments and sublease agreements .

Landlords have adapted their offerings in the face of this changed market demand. Many are now offering flexible, month-to-month leases, allowing tenants to rest easy knowing that they won’t be stuck in a long-term lease agreement if their situation changes.

However, in the case of premium office spaces in highly sought-after locations or warehousing facilities close to major transport links, traditional leases are still very much the norm. In these cases, landlords may have realized that fully reconfiguring their offerings for flexible-usage is financially unrealistic. This may be due to a number of factors, including high-levels of existing demand for traditional leases, the saturation of the flexible workspace market, and the requirements of their typical target tenants.

So, if you’re leasing long-term commercial property and need out of the agreement, or at least to downsize, a lease transfer is a great solution that can leave all contracted parties satisfied. 

What is the Difference Between Commercial Lease Assignment and Subleasing?

A commercial sublease, which is a type of lease transfer, occurs when a tenant who currently leases property agrees to let another tenant use the space concurrently. The agreement involves all three parties: the original tenant, the new tenant, and the property owner.

When you sublease your space, you become the sub-lessor (or sub-landlord), and your new tenant is now the sublessee (or subtenant). Your agreement with them will normally allow them to reside in your space – or a specified portion of it – for either the remaining term of your lease or some other pre-determined length of time. 

It’s important to keep in mind that, as the original lessee, you’re still liable and responsible for making monthly lease payments on a sublet agreement. Therefore, you must collect rent from your subtenant each month while continuing to make rental payments directly to your landlord.

Why Would You Want to Transfer a Lease?

Lease transfers can be done to adjust the leased property size and monthly rent. A business owner may decide that they need to upsize or downsize their leased premises prior to the end of their original lease term.

Also, a lease transfer may be sought because the current tenant wants to vacate the rental property entirely, with no plans to lease elsewhere. This may be due to outside factors (e.g. a global pandemic) or the forced closure of a business.

A lease transfer, or a sublease arrangement, may also be desired so that two businesses with complementary strengths can share a workspace and mutually benefit from their operational proximity. No matter how complementary the proposed new tenant is to the existing tenant, this new business relationship will require the landlord’s permission (unless they have been given prior written consent providing them with sole discretion over subletting)

How to Go About Transferring Your Commercial Lease

The only necessary requirement for lease transfer is to identify a new lessee. In the vast majority of cases, your landlord cannot deny your request for a lease transfer unreasonably , yet it’s still in your best interest to find a new tenant with an established rental history and who can financially afford the rent on time. The only situation in which a commercial landlord can instantly deny a lease transfer request is if this provision was established in the initial lease agreement, however, this type of provision will often scare off prospective tenants.

If you’re looking to transfer your lease, most agents will request that the new tenant apply as if they were renting any other property as a primary lessee. Be sure that, in addition to their application , the prospective tenant provides documentation like company financials and past rental receipts to support your transfer request. This way, there’s no doubt of their ability to be a reliable tenant. 

If you wish to transfer your lease, you must have written consent from your landlord – mere verbal agreement will not suffice. Without your landlords’ express permission in writing, any attempted transfer of lease will be considered null and void. You will then need to fill out a lease assignment agreement, outlining the proposed assignee, current tenant, landlord, and existing lease term.

Important Things to Keep in Mind

To avoid any unnecessary stress or surprises, it helps to understand your rights and responsibilities before beginning the commercial lease transfer process.

Goals and obligations of the original lessee and new tenant

When considering a lease transfer, it is crucial to first identify the goal you hope to achieve through this deal. Most commercial leases have restrictions on transferring the lease, so before beginning any negotiations, all rights and obligations of the involved parties must be closely analyzed. If everyone’s interests are clear from the start, then agreement upon terms should run much more smoothly.

Starting date of lease assignment

In most cases , tenants need to pay their rent a month before move-in date. Confirm that the party being assigned the lease understands when they are responsible for making their first rent payment, so there are no delayed payments. This is also important for sublease agreements, because existing tenants are often liable for any missed rental payments made by the sublessee.

Pitfalls and consequences

Depending on the terms of the lease transfer and the legal documentation, the original lessee may find themselves responsible for any actions or defaults of the new leaseholder. 

As commercial leases often last several years, this could result in a heavy financial burden and significant legal consequences. Careful negotiation at the outset will always lead to a more positive outcome, so it’s important to tick all appropriate procedural and legal boxes when pursuing a commercial lease assignment.

Wrapping up

Before you begin subletting or transferring/assigning a lease, be sure that you understand the objectives of both parties and identify the correct method of altering the lease. Both lessors and lessees should also review all clauses in the lease and negotiate based on everyone’s incentives and interests. If there is any confusion about preparing or reviewing documents related to this process, it’s important to consult with legal advisors for the sake of all parties concerned.

Further Insights

Looking for more articles about the US office market and general office matters? You can find a number of recent posts below! Alternatively, if you’re a business or freelancer looking for flexible workspace in the US, we can help to connect you to a wide range of serviced offices and coworking spaces in highly sought-after locations such as New York City , Los Angeles , Houston , Atlanta , Miami , Chicago , and Dallas . You can also call us to have a discussion about your requirements on 972-913-2742 .

Miami Office Market Report | Q2-Q3 2022 Mid-2022 Las Vegas Office Market Report The Impact of Proptech on Commercial Real Estate 15 In-Person Employee Recognition Ideas for the New World of Work Mid-2022 Houston Commercial Real Estate Market Report Coworking Space for Students on U.S. College Campuses How the Decentralization of Cities Has Changed the U.S. Office Space Market US Office Market Trends 2022 – Statistics, Challenges and Outlook January 2022 – U.S. National Office Market Report The Great Resignation or the Great Retention? How Employers Yield the Power Heading into 2022 5 Ways to Create a Great Office Culture

Tags: 2022 , commercial lease assignment , commercial property , guides , landlords , lease transfer , Office Space , subleasing , tenants This entry was posted on Tuesday, November 8th, 2022 at 8:46 am and is filed under 2022 , Business Advice , Leases , Office Talk .

A little something about you, the author. Nothing lengthy, just an overview.

Top Business Locations

• Atlanta, GA
• Chicago, IL
• Houston, TX
• Los Angeles, CA
• Manhattan, NY
• San Francisco, CA

Recent News

• Mixed-Use Commercial Property: What You Need to Know
• 8 Benefits of In-Person Meetings: Meeting in Person vs Online
• Remote Work Statistics: How Different Generations Feel About Working Remotely
• A New Corporate Vision: How Millennials and Gen Z are Championing CSR and Sustainability
• Understanding Rentable vs Usable Square Footage (and Common Areas)
• September 2023
• August 2023
• February 2023
• January 2023
• December 2022
• November 2022
• October 2022
• September 2022
• August 2022
• February 2022
• December 2021
• November 2021
• February 2021
• January 2021
• December 2020
• August 2020
• February 2020
• January 2020
• October 2019
• February 2017
• January 2017
• November 2016
• October 2016
• February 2016
• January 2016
• November 2015
• October 2015
• August 2015
• February 2015
• January 2015
• November 2014
• October 2014
• September 2014
• August 2014
• December 2013
• February 2013
• October 2012
• September 2012
• August 2012
• February 2012
• November 2010
• February 2010
• December 2009
• October 2009
• September 2009
• August 2009
• February 2009
• January 2009
• November 2008
• October 2008
• September 2008
• Atlanta (4)
• Best Cities for Business in the USA (15)
• Brooklyn (1)
• Business Advice (50)
• Business Districts (11)
• Business Spotlights (15)
• Business Start Ups (18)
• California (11)
• CBD's (4)
• Chicago (5)
• Christmas (2)
• Cities & States (24)
• Companies (3)
• Company Relocation (4)
• Conferences (2)
• Corporate Entertainment (3)
• Corporate Retreats (1)
• Coworking Space (2)
• Eco Matters (2)
• Employee Recognition (1)
• Employee Rights (6)
• Employment and Worklife (11)
• Employment Regulations (7)
• Entrepreneurs (4)
• Environment (1)
• Famous People (1)
• Finance & Tax (1)
• Florida (3)
• Georgia (2)
• Houston (4)
• Illinois (3)
• Landmarks (2)
• Las Vegas (2)
• Los Angeles (6)
• Manhattan (5)
• Market Overviews (5)
• Meetings (7)
• Mixed Use Property (1)
• Mixed-Use Office Space (1)
• National Market Reports (1)
• New York (11)
• North Carolina (1)
• Office Amenities (1)
• Office Etiquette (14)
• Office Health (9)
• Office Organization (18)
• Office Planning (1)
• Office Relations (21)
• Office Renovation (3)
• Office Space Forecasts and Trends (17)
• Office Space Options Series (8)
• Office Talk (34)
• Office-code-of-conduct (3)
• Orlando (1)
• Philadelphia (1)
• Presentations (3)
• Real Estate (7)
• Remote Workers (3)
• Salary Expectations (1)
• San Francisco (4)
• Seattle (2)
• Skyscrapers (1)
• Subleasing (1)
• Technology (3)
• Tourism (3)
• Trends and Statistics (21)
• Uncategorized (3)
• Virtual Offices (2)
• Washington (4)

Copyright © 2000 - 2024. All Rights Reserved. About Offices.net Privacy Policy Contact Us Commercial Real Estate

Call: 0203 417 3700 Menu

Contact | Ask a Question | Book Appointment

4.9 out of 5 Google Reviews

• Send email [email protected]
• Speak to a solicitor 0203 417 3700
• Family Visas UK
• Work Visas UK
• Business Immigration & Sponsor Licence
• Indefinite Leave to Remain (ILR)
• British Citizenship
• Visitor Visas UK
• Student Visas UK
• Appeal Against UK Visa Refusal
• BRP Card Replacement (Lost or Stolen)
• All UK Visas & Immigration Categories
• Visa Application Checking Service
• Getting a divorce
• Annulment of Marriage
• Legal Separation
• Separation Agreement
• Divorce Financial Settlements
• Spousal Maintenance After Divorce
• Non-Molestation Order
• Occupation Order
• Domestic Violence & Abuse
• Child Arrangements Order
• Children Law
• Child Abduction and Relocation
• Child Custody
• Prenuptial Agreement
• Fixed Fee Commercial Lease Solicitors
• Drafting a Commercial Lease Agreement
• Renewing a Commercial Lease
• Extend Your Commercial Lease
• Deed of Variation of a Commercial Lease
• Licence for Alterations (Commercial Property)
• Negotiation of a Commercial Lease
• Commercial Rent Reviews
• Rent Deposit Deeds
• Assignment of a Commercial Lease
• Transfer of Lease to New Owner
• Commercial Sublease Agreement
• Selling a Business
• Buying an Existing Business
• Dilapidations Claims
• Schedule of Dilapidations
• Possession of Commercial Property
• Surrendering a Commercial Lease
• Break Clauses in Commercial Lease
• Ending Your Commercial Lease Early
• Forfeiture of a Commercial Lease
• Restrictive Covenants in Lease
• Money Laundering Solicitors
• Voluntary Police Interview
• Caution Plus 3 Interviews
• Interview Under Caution & Legal Rights
• Stop and Search by the Police
• Extradition
• Fraud Defence Solicitors
• Immigration Fraud
• Sexual Assaults
• Theft, Burglary, Robbery or Shoplifting
• Illegal Controlled Drugs
• Indecent Images Offences
• Tax And Excise HMRC Offenses
• Road Traffic Offenses
• Statutory Declaration
• Lasting Power of Attorney (LPA)
• Certify Passport Photo (True Likeness)
• Certifying a Document (True Copy)
• London Office
• General Enquiries
• Book an Appointment
• Map & Driving Directions

An assignment of a commercial lease is a process by which the current tenant of a leased commercial property transfers its leasehold rights to a new tenant.

The new tenant takes over the obligations and responsibilities of the lease, including paying rent and maintaining the property during the remaining lease term. The assignment process involves various legal and administrative steps, including obtaining the landlord’s consent and preparing and executing a lease assignment agreement.

Do you need help with the assignment of a commercial lease? Call our fixed-fee commercial property solicitors on 020 3417 3700 or fill in the enquiry form .

Our commercial lease solicitor in Wembley, London will help you to understand the rights & obligations of all parties involved in the lease assignment process. We can provide guidance and ensure that the process is conducted correctly.

No matter where your commercial property is, our commercial lease solicitors provide legal services regarding the assignment of commercial leases throughout England and Wales.

Table of Contents

What is an assignment of a lease?

5 things you should know about lease assignments, what is the process of assigning a lease in the uk, what is the difference between assignment and transfer of lease, do you need a solicitor to assign a lease, how much do solicitors charge for the assignment of the lease.

• Why choose Wembley Solicitors?

Frequently Asked Questions

• Need Legal Advice & Assistance?

An assignment of a lease is a legal process that allows the original tenant (assignor) to transfer their rights and obligations under the lease agreement to a new tenant (assignee).

When a lease is assigned, the assignee effectively takes over the remaining term of the lease and assumes all the responsibilities and liabilities outlined in the original lease agreement. The assignor is usually released from their obligations, but this depends on the terms negotiated with the landlord.

Here are a few key points to understand about lease assignments in the UK:

• Legal Documentation
• Leasehold Covenants
• Landlord's Rights

Lease assignments typically require the consent of the landlord or the freeholder, as most lease agreements have clauses that restrict or regulate assignments. The landlord may have specific criteria or conditions for approving an assignment.

2. Legal Documentation

To complete an assignment of a lease, the assignor and assignee must typically enter into a legal agreement known as a Deed of Assignment. This document outlines the terms of the transfer and ensures that all parties involved are aware of their rights and obligations.

3. Leasehold Covenants

The assignee is bound by the original lease's covenants, which are the terms and conditions that govern the lease. These may include payment of rent, maintenance responsibilities, restrictions on use, and other obligations.

4. Liability

While the assignor is usually released from future obligations, it is important to note that they may still be liable for any breaches of the lease agreement that occurred before the assignment.

5. Landlord's Rights

The landlord typically retains the right to review and approve the proposed assignee, ensuring they are financially capable and suitable to take over the lease. The landlord may also have the power to request reasonable fees or costs associated with reviewing and processing the assignment.

The process of assigning a lease in the UK typically involves the following steps:

• Review the Lease Agreement
• Obtain Landlord's Consent
• Negotiate Terms
• Deed of Assignment
• Land Registry Notification
• Completion and Handover

1. Review the Lease Agreement

The assignor (current tenant) should review the existing lease agreement to understand the terms and conditions associated with the lease assignment. It is important to check for any clauses or restrictions on assignments and seek legal advice.

2. Obtain Landlord's Consent

The assignor must seek the landlord's consent to assign the lease. This usually involves making a formal request in writing by providing details of the proposed assignee and their financial standing. The landlord may request additional information or documents as part of their assessment process.

3. Negotiate Terms

The assignor and assignee negotiate the terms of the assignment, including any financial arrangements and responsibilities. This may include agreeing on rent apportionment, security deposits, and any other relevant terms. Legal professionals can assist in ensuring that the negotiation process is fair and comprehensive.

4. Deed of Assignment

Once the terms are agreed upon, a Deed of Assignment is drafted. This document outlines the specifics of the lease assignment, including the names & details of the parties involved, the property address, the assignment effective date, and any additional terms or conditions. The Deed of Assignment must be signed by both the assignor and assignee in the presence of witnesses.

5. Land Registry Notification

After the Deed of Assignment is signed, it is typically submitted to the Land Registry. This ensures that the assignment is officially recorded and that the assignee's interest in the property is registered.

6. Completion and Handover

Upon completion of the assignment, the assignee assumes all rights and obligations under the lease. This includes paying rent, fulfilling maintenance responsibilities, and adhering to any other lease terms. The assignor is typically released from future liabilities, subject to the terms negotiated with the landlord.

Throughout the process, it is advisable for both parties to seek legal advice to ensure that their interests are protected and that all necessary legal requirements are met. Additionally, consulting with the landlord or a property professional can help navigate any specific requirements or conditions set by the landlord regarding lease assignments.

The assignment involves transferring the rights and obligations of the lease from one party (the assignor) to another party (the assignee). The assignor is typically the current tenant, while the assignee becomes the new tenant.

On the other hand, a lease transfer refers to transferring the leasehold interest from the current tenant (transferor) to a new tenant (transferee). In a lease transfer, the existing tenant is completely replaced by the new tenant.

It is crucial to consult with legal professionals, such as solicitors or commercial property specialists when dealing with lease assignments in the UK. They can provide guidance and ensure that the process is conducted correctly, protecting the interests of all parties involved.

At Wembley Solicitors, we offer affordable legal services regarding the assignment of a commercial lease on a fixed fee basis with no hidden costs or nasty financial surprises.

Our commercial property solicitors in London charge a fixed fee between £1000-£1500 (Plus VAT) for complete services regarding the assignment of a lease.

Why choose Wembley Solicitors for the assignment of a commercial lease?

• We have extensive knowledge and experience in drafting commercial leases and assignments of leases.
• Our commercial lease solicitors provide legal services on a fixed fee basis without blowing your budget and with no hidden costs.
• We provide professional legal advice and assistance at every step and keep you updated as your matter progresses.
• We provide legal services remotely throughout England and Wales. You do not need to physically attend our office.
• We have a team of qualified and accredited solicitors.
• We are authorised and regulated by the Solicitors Regulation Authority (SRA), so you know you are in safe hands.

We provide legal advice and services to both landlords and tenants. Call our property solicitor today at 020 3417 3700 for more information about the services.

Who pays lease assignment fees?

The responsibility for paying lease assignment fees can vary depending on various factors, including the terms negotiated between the parties involved and any legal or contractual provisions.

Usually, the current tenant (the assignor) and the new tenant (the assignee) bear their own legal costs.

How long does it take to assign a commercial lease?

In general, the assignment of the lease process takes around 3-4 weeks. However, it could take anywhere from a few weeks to several months, depending on how complex the lease is and how long it takes to obtain the landlord's consent.

The amount of time it takes to assign a commercial lease in the UK can vary depending on several factors, including the agreement between the parties, the complexity of the lease and the involvement of third parties, such as solicitors and landlords.

Need legal advice & assistance?

Do you need legal advice or assistance with a commercial property lease? Our expert property solicitors are ready to help you. We're authorised and regulated by the Solicitors Regulation Authority (SRA), so you know you're in safe hands.

Contact our solicitor today to get legal advice and assistance with your legal matters. You can call us on 02034173700 or leave your details here for a callback request regarding your legal matter.

Legal Services

• Visas & Immigration
• Divorce & Family Law
• Commercial Lease
• Criminal Law
• Book a Consultation
• Our Legal Fees

Useful Links

Business hours.

• MON----09:30 - 17:30
• TUE-----09:30 - 17:30
• WED----09:30 - 17:30
• THU----09:30 - 17:30
• FRI-----09:30 - 17:30
• SAT-----10:00 - 14:00
• SUN----Closed

Regulated by SRA

Wembley Solicitors is a Trading name of Wembley Solicitors Limited registered under Company Number 11728635 in England & Wales with its registered office at 561 High Road, Wembley, Middlesex, HA0 2DW and is authorised and regulated by the Solicitors Regulation Authority (SRA Registration 806549).

© 2024 Wembley Solicitors, All rights reserved. Website Designed by Legal Workspace

• Solicitor to Certify Documents
• Power of Attorney
• Immigration Solicitors Near Wimbledon
• Immigration Solicitors Near Ealing
• Immigration Solicitors Near Southall
• Immigration Solicitors Near Harrow
• Book an appointment

Commercial lease assignments: A guide for businesses

Business owners often consider commercial lease assignments to enhance flexibility, mitigate financial burdens, or adapt to evolving operational requirements. 

The work landscape, particularly in cities like London, is also evolving with the widespread adoption of remote and hybrid models, with many tenants seeking to streamline their footprints and reduce overhead costs.

Whether your business is looking for a more suitable space or navigating market fluctuations, this article will give you an overview of the lease assignment process and the essential legal aspects to consider.

What is the assignment of a lease?

The assignment of a lease refers to the legal process through which a tenant transfers their lease obligations and rights to another party, known as the assignee. This strategic move allows businesses to exit their premises before the lease term ends, with the assignee assuming responsibility for complying with the lease terms and obligations.

Businesses may consider lease assignment for various reasons, such as relocation, financial constraints, or changes in business needs. For instance, a company experiencing rapid growth may seek more extensive premises, making lease assignment an attractive option to exit the current arrangement.

What role does a solicitor play?

Understanding the legal complexities is vital when considering the assignment of a commercial lease. In this process, solicitors offer expert advice and can negotiate with the landlord to secure favourable terms within the assignment agreement, safeguarding the client's interests. 

Their pivotal role extends to drafting and finalising essential legal documents associated with lease assignments, such as:

• Licence to assign: A solicitor can assist in drafting this document, ensuring that it covers all necessary conditions and terms for the assignment, meets legal requirements, and protects the interests of both parties.  
• Rent deposit deed: Solicitors can draft the rent deposit deed, specifying the details of the deposit arrangement, its purpose, and the conditions under which the landlord can use the deposit, providing legal clarity for both parties.  
• Authorised guarantee agreement (AGA): Solicitors are instrumental in creating an AGA, outlining the legal commitment by the outgoing tenant to guarantee the new tenant's performance. They ensure that the agreement is comprehensive and legally sound, protecting the interests of the landlord and the outgoing tenant.

Avoiding the legal pitfalls of lease assignments

While every commercial lease assignment is unique, several legal aspects require careful consideration.

1. Leasehold covenants: Ensuring compliance 

Understanding leasehold covenants is essential in the lease assignment process as it involves recognising and complying with the agreed-upon obligations and restrictions outlined in the lease agreement. These covenants dictate how the property can be used, any alterations or improvements allowed, and other conditions the current and potential tenants must adhere to. 

For example, if a leasehold covenant stipulates that the premises can only be used for office purposes, you cannot assign the lease to a manufacturing company.

Failure to understand and meet these covenants could lead to complications, including the landlord's refusal to consent to the assignment or potential legal issues. Comprehending these covenants is essential for a smooth and legally compliant lease assignment.

2. Securing the landlord's consent: A prerequisite

Before proceeding with a lease assignment, obtaining the landlord's consent is paramount. This process involves submitting a formal request providing details about the proposed assignee and their financial stability.

While landlords cannot unreasonably withhold consent, specific lease terms may give them grounds to do so. Understanding the particular conditions for refusal is crucial, so it is important to seek legal advice as soon as possible.

3. Liabilities when assigning a commercial lease

Understanding liabilities when assigning a lease is crucial for business owners as it directly impacts their ongoing responsibilities and potential financial obligations. Transferring a lease doesn't automatically absolve the original tenant of all liabilities; they may still be held accountable if the new tenant defaults on payments or breaches lease terms. 

An authorised guarantee agreement (AGA) is a legal commitment often used in the context of commercial lease assignments. When a tenant assigns its lease to a new tenant, the outgoing tenant (assignor) may be required to provide an AGA. This agreement serves as a guarantee by the original tenant to the landlord, ensuring that the obligations of the new tenant (assignee) under the lease will be fulfilled.

The AGA means that if the new tenant defaults on the lease obligations, the outgoing tenant remains liable, guaranteeing the landlord a level of financial security. The original tenant can be pursued for any unpaid rent or other breaches of the lease terms by the new tenant. The AGA provides a legal mechanism for the landlord to seek redress from the outgoing tenant if issues arise with the assigned lease. 

Clear comprehension of these liabilities ensures informed decision-making and risk mitigation during the lease assignment process.

4. Navigating regulatory changes

The evolving regulatory landscape, particularly factors like Energy Performance Certificates (EPCs), can add additional challenges to lease assignments. For example, if you took on a lease before Minimum Energy Efficiency Standards (MEES) came into effect on April 1, 2018, the regulations did not apply at the time of the lease's inception. However, if you are now considering assigning the lease, MEES regulations would be applicable. 

A landlord may be less willing to agree to the lease assignment if it becomes essential to ensure that the property meets the required EPC standards to comply with the current regulations. 

5. Formalising with Land Registry: A vital step

Registering an assignment with the Land Registry is an important step in the lease assignment process. If a lease is granted with a term of over seven years, it must be registered to record the change of tenant officially. 

Failure to complete this registration can have significant consequences, including potential challenges to the validity and enforceability of the assignment. 

What are the alternatives to assigning a commercial lease?

When considering an exit from a commercial lease, it's crucial to recognise that assignment is just one of several options. Exploring these options is vital, and seeking guidance from a solicitor ensures a comprehensive understanding of the available choices.

• Assignment vs. subletting: Assignment involves permanently transferring your lease obligations to a new tenant. On the other hand, subletting a commercial property allows you to lease a part of your space to another party, retaining your responsibility for the entire lease.  
• Taking advantage of a 'break clause': A break clause is a provision in the lease allowing either party to terminate the agreement early, typically at predefined intervals. It provides a strategic exit, but conditions and notice periods must align with the lease terms.  
• Early termination with landlord's consent: Seeking your landlord's agreement to terminate the lease prematurely can be challenging. It requires negotiations and may involve financial considerations. Legal advice is essential to navigate this complex process and safeguard your interests.

Business owners can make informed decisions that align with their strategic objectives by understanding the intricacies, exploring alternatives, and leveraging legal expertise.

Commercial lease expertise

Our team of experienced commercial property solicitors is dedicated to guiding you through the lease assignment process. Every business has unique needs, so we offer tailored advice that aligns with your objectives. 

In addition to lease assignments, we can provide guidance on alternative options for ending a commercial lease, such as subletting, break clauses, and lease termination. 

With solicitors in London, Brighton, East Sussex, and Cumbria, we assist commercial landlords and tenants nationwide.

Looking to assign a commercial lease?

You might also like to read:

Subletting strategies: maximising flexibility in commercial leases, how to surrender a commercial lease: a guide for landlords and tenants.

How to end a commercial lease early: A quick guide

Repair clauses in commercial leases: what tenants need to know.

1300 937 574

Articles > Commercial Property

How Can I Transfer or Assign a Commercial Lease?

June 7, 2021   Dean Wolman Philip Evangelou

In certain cases, a tenant can choose to exit their commercial lease prior to the end of their lease term by either transferring or assigning the lease to another party, known as the assignee. Transfers or assignment of leases require explicit permission for this mechanism in the original lease. Assuming it does exist however, this scenario usually occurs when a tenant sells their business to another party (who agrees to accept the current lease rather than entering into a new one with the landlord), or when a tenant wishes to exit their lease and finds a party willing to take on the existing lease. 

Process of transferring a Commercial Lease

The first steps involved in exiting a commercial lease and considering assignment include:

• Reviewing the current lease to determine whether it can be transferred or assigned; 
• Determining what requirements must be fulfilled to obtain the landlord’s consent; and
• Communicating with the landlord to obtain their consent to be able to assign the lease. 

The landlord must approve of the proposed tenant whom the existing tenant wishes to assign the lease to. The landlord will determine their approval by assessing whether the new tenant can pay rent as well as deciding if the new tenant is the appropriate fit. A landlord will generally ask that the proposed new tenant provides both financial and business references to perform this assessment. 

Deed of Assignment 

Once the landlord’s consent is obtained, a legal document known as a deed of consent and assignment will be developed. The deed of consent transfers all obligations of the current tenant under the existing lease, to the new tenant. 

A deed of consent includes:

• Confirmation of the landlord’s consent to transfer the lease 
• An agreement from the existing tenant to transfer their entire interest in the lease to the new tenant. This will include a specified date of transfer (date of assignment) 
• The new tenant agrees to undertake all rights and obligations of the lease from the date of transfer. 

The Current Tenant

For the successful transfer of a commercial lease, the current tenant must be relieved from all rights and obligations under the lease from the specified transfer date. To ensure this occurs:

• A deed of assignment will legalize the tenant’s relief from any claims or liabilities under the lease, from the date of transfer. 
• Any security provided by the exiting tenant will be refunded.

It is important to remember that the tenant is bound to the terms of the lease and is required to fulfill their obligations until the completion of the deed of assignment and subsequent formal transfer of the commercial lease. 

The Proposed New Tenant

The proposed new tenant’s approval to take on the commercial lease is dependent on the landlord’s acceptance of the lease transfer. This approval is specified in the deed of assignment whereby the landlord accepts the proposed new tenant as assignee from the specified date of transfer. Prior to entering the commercial lease, there are a number of things that the incoming tenant should consider. These include: 

• Reviewing the contents of the existing lease prior to signing the deed of assignment
• Ensuring that the terms of the lease are reasonable and that sufficient security and tenure is provided 

What happens if the lease being transferred is a Retail Lease? 

If the lease being transferred takes the form of a retail lease, the tenant will be required to give the new tenant (assignee) a disclosure statement. A disclosure statement will detail any changes agreed to by the landlord during the duration of the lease. 

The disclosure statement provides the assignee with information that is essential to consider including:

• The terms of release and any renewal options;
• proposed commencement date of the lease
• details of the premises; 
• the requirements to use the premises;
• Annual base rent payable under the lease; and 
• Outgoings payable under the lease 

A tenant is entitled to request an up to date disclosure statement prior from the landlord, prior to transferring the commercial lease. The landlord has an obligation to fulfill the tenant’s request. This must be provided within a specific time frame, usually 14 days after the tenant makes the request. 

Failure to provide a disclosure statement may result in consequences. However, these consequences often differ between states and territories. Consequences may include:

• The assignee withholding their rental payment;
• The assignee seeks compensation from the landlord; or
• The assignee terminates the lease prior to the end of the lease term.

Parties entering into a commercial lease must be aware of the specific requirements and consequences of disclosure statements, within their particular state. 

Do you need to pay stamp duty? 

In NSW it is essential that you pay stamp duty upon assigning a commercial or retail lease. Stamp duty is a tax imposed on the purchase of assets and transactions of property. The value of stamp duty required to be paid depends on whether there is any money involved in the transfer. 

Should the commercial lease transfer not involve any form of monetary payment, the exiting tenant is still required to pay the NSW Office of State Revenue a nominal $10 fee. It is essential that this stamp duty fee is paid to ensure that the transfer is accepted. 

Failure to pay this nominal stamp duty will delay the transfer of the commercial lease. 

What to take away from this article?

A tenant who wishes to exit their commercial lease can either transfer or assign this lease. It is essential that the tenant is aware of their rights and obligations under the lease and the process involved with transferring the lease to a proposed new tenant. Additionally, it is important to consider that a transfer requires the approval and consent of the landlord. Should the transfer take the form of a retail lease, there are a number of additional requirements that need to be fulfilled, including a disclosure statement. To ensure a smooth commercial lease transfer, it is imperative that you familiarise yourself with a deed of assignment and the requirements necessary for it to be satisfied. 

If you have any questions regarding the transfer or assignment of a commercial lease or require assistance with any aspect of commercial property, get in touch with us via the contact form or by calling 1300 337 997. 

About Dean Wolman

View all posts by Dean Wolman

About Philip Evangelou

View all posts by Philip Evangelou

Related Articles

Deed of Assignment - Commercial Lease

If the commercial lease was for a term of up to 7 years (i.e. a period not exceeding 7 years) select the option "Unregistered Lease (i.e. a lease for a commercial property that does not exceed 7 years)". If the commercial lease was for a term of more than 7 years (i.e. a period exceeding 7 years) select the option "Registered Lease (i.e. a lease for a commercial property that is for more than 7 years)".

Need personalised assistance? At the end, you can choose to consult a lawyer.

DEED OF ASSIGNMENT OF COMMERCIAL LEASE

This deed is dated ________

________ , a company incorporated and registered in England and Wales with Company Number ________ whose registered office address is at ( the Assignor ):

________ , a company incorporated and registered in England and Wales with Company Number ________ whose registered office address is at ( the Assignee ):

I. The remainder of the term under the Lease is vested in the Assignor.

II. The Assignor has agreed to assign the Lease to the Assignee on the terms contained in this deed.

III. The Landlord's consent is not a requirement for assignment under the Lease.

AGREED TERMS

1. Interpretation

Contract: a contract for the assignment of the Lease dated ________ , made between ________ and ________ .

Lease: a lease dated ________ , between ________ (the Landlord ) and ________ (the Tenant ) and ________ (the Guarantor ) relating to the property:

Lease Obligations: the tenant covenant and all the terms and conditions contained or referred to in the Lease.

Premium: the sum of £ ________ (________) (exclusive of VAT).

Property: the property located at the address:

Rent: the rent reserved by the Lease.

VAT: value added tax chargeable in the UK.

(a). The headings of Clauses in this deed shall not affect the interpretation of this deed.

(b). A reference to the Lease includes any deed, licence, consent, approval or any other instrument that is supplemental to it.

(c). A reference to the Property includes the whole and any part of it.

(d). Tenant covenant has the same definition under the Landlord and Tenant (Covenants) Act 1995.

(e). A person also refers to a natural person, corporate or unincorporated body (regardless of its separate legal personality).

(f). Unless required otherwise in the context used, words in the singular shall include the plural and words in the plural shall include the singular.

(g). A reference to legislation or a legislative provision is a reference to the amended version, extended version or re-enacted version from time to time.

(h). Any obligation requiring a party to not do something also includes an obligation to not allow such a thing to be done.

2. ASSIGNMENT

(a). On account of the Assignee's payment of the Premium to the Assignor (of which the Assignor acknowledges receipt), the Assignor assigns the Property to the Assignee for the remainder of the unexpired term of the Lease, subject to the payment of the Rent and adhering to the Lease Obligations.

(b). The Assignee shall pay the Premium via bank transfer to the following bank account:

(c). The Assignee shall pay the Premium to the Assignee using the agreed payment method on ________ .

(d). The Property shall be assigned without any adverse right or claim affecting its use or transfer, except the following:

(I). any matters, except financial charges, that are contained or referred to in the entries or records made in any registers maintained by the Land Charges Department of HM Land Registry as at ________ ;

(II). all matters that are contained or referenced in the Lease;

(III). any matters that can be discovered by inspecting the Property before the date of this deed.

(IV). any matters which the Assignor is not, nor could it be aware of;

(V). any matters which have been disclosed or which would have been disclosed by the searches and enquiries which a prudent Assignee would have made before entering this deed;

(VI). any notice, order or proposal given or made (before or after the date of this deed) by a body acting on statutory authority;

(VII). any matters which are, or (in the case of a Lease that will be unregistered) would be, unregistered interests which override first registration under Schedule 1 of the Land Registration Act 2002; and

(VIII). any matters disclosed in the Title Documents.

3. GUARANTEE OF TITLE

(a). The Property comes assigned with full title guarantee.

(b). The implied covenant set out in section 4(1)(b) of the LPMPA 1994 shall not extend to any breach of the Lease relating to the physical state or condition of the Property.

(c). For the purposes of section 6(2) of the LPMPA 1994, and notwithstanding section 6(3) of the LPMPA 1994, all matters which have been recorded in publicly accessible registers, at the date of this deed, shall be deemed to be within the Assignee's actual knowledge.

4. INDEMNITY

(a). The assignee covenants that, from the date of this deed until the earlier of the term of the lease or until the Assignee is released from the tenant covenant imposed by the Landlord and Tenant (Covenants) Act 1995, it will pay the Rent and any VAT payable on it and observe and perform the Lease Obligations and indemnify the Assignor against all proceedings, costs, claims and expenses arising because of any failure to do so.

(b). By an indemnity only, the Assignee covenants with the Assignor that it will observe and perform the changes, encumbrances, covenants and restrictions contained or referred to in the Title Documents for as long as they are subsisting and capable of taking effect. The Assignee shall also keep the Assignor indemnified against all proceedings, costs, claims and expenses arising from any failure to do so.

(a). Upon the completion of this deed, the Assignee shall make sure to pay £ ________ towards:

(I). the Assignor's legal costs; and

(II). any disbursements incurred in connection with the assignment of the lease.

(a). Every amount identified as payable by a party to the other party under this deed shall be exclusive of any applicable VAT.

(b). Where there is VAT chargeable on any supply made under this deed, the party receiving the supply shall, subject to receipt of a valid VAT invoice, pay the party the supplier an amount equal to that VAT as additional consideration on the date that the supply is made.

7. 585585 828552585

(a). 5588 5225 82282825228 252 222852 525222222 8228222 252 2552828 525 25228 2528252282 2825 588 25288258 58885888228, 82552822252282, 222228528228, 555522222228, 52525825258228 525 5252222228 8228222 2522 52852822 22 828 8582282 252225.

(b). 552 88882222 525282 582228825228 2552 82 22225822 2588 5225, 82 5228 222 5282 22 522 52252822252822 25 85555222 (82228222 25 222882222) 58852 2522 25282 85885 552:

(I). 822258225 82 2588 5225; 25

(II). 52258825 82 522 8582222 82552822252282 25 528222828 2552 252 88882225'8 8228225282 558 25288525 22 522 8582222 228585828 558825 82 252 88882222'8 8228225282 822252 252 5522 22 2588 5225.

(c). 552 885888822 225 25555 85588 222 82 25885525 82 52225822 822258225 82 2588 885582.

8. RIGHTS OF THIRD PARTIES

This deed does not give rise to any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this deed.

9. GOVERNING LAW

This deed and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales.

10. JURISDICTION

Each party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this deed or its matter or formation.

Executed as a deed by the Assignor acting by:

________ , ________

_______________________

( the Assignor )

Executed as a deed by the Assignee acting by:

______________________

( the Assignee )

HOW TO CUSTOMISE THE TEMPLATE

Answer the question, then click on "Next".

The document is written according to your responses - clauses are added or removed, paragraphs are customised, words are changed, etc.

At the end, you will immediately receive the document in Word and PDF formats. You can then open the Word document to modify it and reuse it however you wish.

You will also have the option of requesting assistance from a lawyer.

How Do I Assign a Commercial Lease in the UK?

By Clare Farmer

Updated on 27 June 2023 Reading time: 5 minutes

This article meets our strict editorial principles. Our lawyers, experienced writers and legally trained editorial team put every effort into ensuring the information published on our website is accurate. We encourage you to seek independent legal advice. Learn more .

Deed of Assignment

What happens after the lease is assigned, other ways to end your lease agreement, key takeaways, frequently asked questions.

As a commercial tenant, you may not be able to honour your commercial lease for the entire lease term. The lease term refers to the time period in which you occupy the property. This property may be your business’ HQ, warehouse or distribution centre. There are various reasons as to why you may want to terminate your lease early and assign the lease. This article will explain the three critical instructions for assigning a UK commercial lease.

Assignment is a property transfer by the ‘assignor’ (the holder of the property) to the ‘assignee’ (the person receiving the property). As the commercial tenant, you are also the ‘assignor’ and, as such, may effectively assign your lease to another business owner. At this point, they become the new commercial tenant. This means that the new tenant is liable for the lease obligations in the commercial lease, such as rent payments and repair obligations. 

The effect of an assignment is that you are now no longer a party to the lease. However, you will still be liable for the lease obligations if your landlord requires you to guarantee the new tenant’s lease obligations. This will be where an Authorised Guarantee Agreement (AGA) is put in place. 

Whilst some commercial leases may not allow lease assignment, those which do will generally have conditions attached for the assignment to be valid. The assignment provision may detail whether there are conditions you must satisfy.

If you want to assign your commercial lease, you must know how to do so. Below, we detail three essential instructions to assign a UK commercial lease. 

1.  Find an Assignee

If you wish to assign your commercial lease, the first step will be to find a suitable business owner. They will be the assignee. A potential assignee will want first to inspect the lease terms in your commercial lease agreement before they agree to take on the lease. One term they will specifically look for is the permitted use of the commercial premises. This is because they will need to ensure that their business activities can occur on the commercial premises. 

They may also want to carry out checks on, for example:

• the local authority;
• utility companies; and
• environmental issues.

It is not just your prospective assignee who will carry out checks when you assign the lease. You also will want to carry out checks on your prospective assignee, as will your commercial landlord. It is best to pre-empt the checks your landlord will carry out to ensure you select an assignee who can meet them satisfactorily. For example, you will need to check your assignee’s:

• financial status; and
• previous lease references.

2. Landlord Consent

Once you are satisfied you have found a suitable assignee for your lease assignment, you will likely need to get your commercial landlord’s consent before you assign your commercial lease. You should do this as soon as possible. UK law states that your landlord must respond to your request without unreasonable delay and should not unreasonably refuse to give consent for the lease assignment. It is advisable to get a solicitor to assist you with this.

Other Consent Considerations

Before you assign the lease to a specific business owner, you will also have to get your landlord’s consent that you may indeed assign the lease to this person. A landlord may include conditions in the commercial lease agreement as to who the assignee can be to ensure that the prospective tenant:

• can pay the rent;
• will look after the landlord’s commercial property; and
• will behave well on the commercial premises to avoid disturbing other businesses and tainting the landlord’s name.

Your landlord has the right to ask you to provide documents and information about the assignee. Your landlord may require information about your assignee’s position, such as their financial status, which you should have previously checked.

Once your landlord agrees to assign the lease, they will give you a document which is a licence to assign. They may also require you to sign an Authorised Guarantee Agreement. Your solicitor will typically review both documents before the documents are finalised and thereafter become binding.

If your commercial lease details no conditions surrounding the assignment of a lease, such as the need to get your landlord’s consent, you will not need a licence to assign the lease.

3. Assign the Lease

Once you have found a business owner to be the assignee for your commercial lease and your landlord consents to them being the new commercial tenant, you can start the lease transfer process and assign the lease. 

As the tenant, you are responsible for assigning the lease. The process might vary depending on the lease term. If the lease is for seven years or more, you should use a Land Registry form which is a TR1. This method involves a simple transfer of the lease and is suitable where your lease is a registered lease. Where your commercial lease is less than seven years, you can assign it with a deed of assignment. This method is suitable where the commercial lease is unregistered. 

Once the landlord consents to the proposed new tenant, the landlord and the new tenant will enter into a deed of assignment. This is the formal document that transfers your lease to the new tenant. It ends your duties concerning the lease, which the new tenant then takes over and agrees to be bound by. Since this is a legal document that all parties will need legal advice on, you and the new tenant must decide who will pay for the landlord’s legal fees.

Provided you did not enter into an authorised guarantee agreement with your now ex-landlord, you are released from any responsibility concerning the commercial premises you leased. The new tenant takes those responsibilities on. If you had to enter into an authorised guarantee agreement to secure the landlord’s agreement to the new tenant, that new tenant is still responsible for abiding by the terms of the original commercial lease. However, you are still potentially liable for the new tenant’s breach of that lease.

Before you ask your landlord if you can assign your lease to someone else, note that there are other ways to end your lease agreement early. These include:

• taking advantage of a ‘break clause’ (also known as an early termination clause ) in your lease agreement;
• asking your landlord to agree to let you terminate your lease early; and
• asking your landlord if you can find a subtenant for the property you rent.

This cheat sheet outlines what you should be aware of in your lease agreement.

Assigning a lease allows a tenant to terminate a commercial lease before it comes to an end. It allows you to end your lease obligations and pass these on to another business owner. If you wish to assign your lease, there are three key instructions on how to assign your commercial lease. The first is to find a suitable assignee (a new tenant) for your commercial premises. The new tenant will need, for example, to carry on a business similar to yours. The second is to gain consent to assign your lease from your commercial landlord, which may require you to obtain a licence to assign. Your landlord must also agree to the new commercial tenant you propose as the assignee. It is likely your landlord will carry out financial checks to confirm the proposed commercial tenant’s financial health. Finally, you can assign the lease with a land registry form or deed of assignment.

If you need help understanding the key instructions to assign a commercial lease in the UK, contact our experienced leasing lawyers as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page .

Lease assignment is when a commercial tenant transfers their lease to a third party. The third party will then take on the lease obligations and be the new tenant in a commercial lease.

The first key instruction when you want to assign a commercial lease is to find a suitable assignee; this is a  third party that becomes the new tenant and is bound by the commercial lease.

We appreciate your feedback – your submission has been successfully received.

Register for our free webinars

Capital raising essentials for startups, understanding your business’ new employment law obligations, contact us now.

Fill out the form and we will contact you within one business day

Related articles

4 Ways to End Your Commercial Lease Early in the UK

5 Tips When Purchasing a Business in England and Wales

Can My Landlord Terminate My Commercial Lease in the UK?

Commercial Rent Reviews in England and Wales

We’re an award-winning law firm

2023 Economic Innovator of the Year Finalist - The Spectator

2023 Law Company of the Year Finalist - The Lawyer Awards

2023 Future of Legal Services Innovation - Legal Innovation Awards

2021 Fastest Growing Law Firm in APAC - Financial Times

• Business Legal Services
• Banking & Finance Law
• Business Disputes
• Business Immigration Law
• Commercial Law
• Commercial Property Law
• Construction Law
• Corporate Law
• Data Protection & Privacy Law
• Employee Share Schemes
• Employment Law
• Financial Services Regulation
• Funding & Investment
• Insolvency & Corporate Recovery
• Intellectual Property
• IT & Commercial Technology Law
• Overview   
• Acquisition & Leveraged Debt   
• Asset Finance & Asset Based Lending   
• Construction & Development Finance   
• Debt Finance   
• Financial Services Regulation   
• Funding & Investment   
• Trade Finance   
• Alternative Dispute Resolution   
• Business Dispute Case Assessment   
• Commercial Contract Disputes   
• Commercial Property Disputes   
• Construction & Engineering Disputes   
• Defending Employment Tribunal claims   
• Shareholder Disputes   
• Intellectual Property Disputes   
• Litigation & Arbitration   
• Partnership Disputes   
• Professional Negligence Claims   
• Public Procurement Challenges   
• Agency Agreements   
• Commercial Contracts   
• Confidentiality & Non-Disclosure Agreements   
• Franchise Law   
• Intellectual Property in Commercial Contracts   
• Joint Venture Agreements   
• Sale & Distribution Agreements   
• Service Agreements   
• Subcontractor Agreements   
• Supply of Goods Agreements   
• Terms of Business   
• Commercial Leases   
• Corporate Transactions   
• Property Development   
• Property Finance   
• Sale and Purchase   
• Unregistered Land   
• Construction & Engineering Contracts   
• Banking & Finance Law   
• B Corp Conversion Lawyers   
• Cap Table Creation & Management   
• Corporate Governance   
• Corporate Restructuring   
• Employee Share Schemes   
• Exits & Disposals   
• LLP Agreements   
• Mergers & Acquisitions (M&A)   
• Share Capital   
• Cybersecurity   
• Data Breaches & Incident Management   
• Data Governance   
• Data Protection Health Check   
• Data Protection Impact Assessments   
• GDPR Compliance   
• GDPR Training   
• Outsourced DPO   
• Support for DPOs   
• EMI Share Options   
• Employee Ownership Trusts (EOTs)   
• Flowering Shares   
• Growth Shares   
• Hurdle Shares   
• Phantom Share Schemes   
• Non Tax-Advantaged Share Plans   
• Absence & Sickness Management   
• Discipline & Grievance Procedures   
• Discrimination Claims   
• Employment Contracts   
• Employment Status and IR35   
• HR & Employment Law Training   
• HR Compliance Audit   
• Redundancies & Business Reorganisations   
• Senior Employee Exits   
• Settlement Agreements   
• Transactions & TUPE   
• Consumer Credit & Hire   
• Payment Services   
• Regulated Banking & Finance Activities   
• Crowdfunding   
• EIS & SEIS   
• Investment Agreements   
• Pre-Seed & Seed Funding   
• Private Equity   
• Series A, B & C Funding   
• Term Sheets   
• Venture Capital   
• Director Disqualification Solicitors   
• Copyright Lawyers   
• Design Rights   
• Intellectual Property Audits   
• Intellectual Property Licensing   
• Intellectual Property Strategy   
• Online Brand Protection   
• Patent Litigation   
• Patent Protection & Management   
• Trade Marks   
• Utility Models   
• Cloud Service Agreements   
• SaaS Agreements   
• Software Licence Agreements   
• The big idea   
• Getting started   
• Getting on with it   
• Scaling up   
• Looking to exit   
• Creative Industries
• Energy, Utilities & Environment
• Life Sciences
• Manufacturing & Engineering
• Public Sector
• Retail & Luxury Brands
• Enterprise Plan
• On-Demand Plan
• Fixed Fee Products

• Meet Our Team
• Press & Media
• What Our Clients Say
• Company News
• Client Stories
• Events & Webinars
• Podcasts & Videos
• Thoughts & Opinions
• Knowledge Hub
• Make An Enquiry
• Request A Call Back
• Birmingham   
• Cambridge   
• London   
• Manchester   
• Oxford   
• Sheffield   
• Southampton   

Knowledge Hub for Growth

Assigning a commercial property lease to another business.

In order to grow or react to market conditions your business may need to quickly leave its current premises. If your business rents the premises but there is still time left to run on the lease, what can you do?

A common solution is to transfer your lease to someone else. This process is called ‘assigning a lease’. In this article, we describe how this process operates and what potential problems you may need to overcome. If you need help in this area, our friendly commercial property experts can help.

Traps for the Unwary

How to assign a lease.

‘Assigning’ a lease simply means transferring your lease to another person so that they become the new tenant. Once the assignment has taken place the lease continues to exist and the new tenant becomes liable for all of the tenant’s obligations in the lease.

The first step is to find someone who may want to take over the lease (they are known as ‘the assignee’). Aside from being happy with the rent that is being charged, the assignee will want to review the lease to ensure that it does not contain any onerous or unacceptable terms. This process will be very similar to the one your solicitor carried out when you negotiated the lease in the first place, except that as the assignee will be taking over the existing lease they will have little or no opportunity to change its terms and will therefore have to be happy with it as it stands.

If the lease contains terms which are generally unacceptable in commercial property leases or specifically adversely affect the ability of the new tenant to use the property as they wish, you may have problems in assigning the property. It is therefore worth knowing before you start marketing your lease just what it does or does not allow. For example, it is no good marketing a warehouse to factory owners if it specifically forbids industrial use.

In addition, most tenants will want to carry out the same due diligence process as if it were purchasing a commercial property or negotiating the lease at outset. This usually involves raising queries with the local authority and utility companies as well as finding out about environmental and similar issues. This takes time so do not expect to be able to transfer the lease instantly.

The second step, once an assignee is found and they are happy to take on the lease, is to actually transfer (‘assign’) the lease. Generally this will be done using a Land Registry form known as a TR1 . If the lease is for less than 7 years, then the lease can be assigned by using a deed of assignment. Both these documents have the same effect and will generally be executed by both you as the current tenant and the assignee.

In theory, you can assign your lease to whoever and whenever you like. However, most landlords are not willing to allow the tenant such freedom and therefore write into the lease restrictions on to whom a lease can be assigned and on what basis. In most cases, the landlord will be required to consent to the assignment before it can go ahead. This is where most of the practical problems arise as we explore in more detail below.

When and why to assign a lease

A tenant will generally look to assign its lease when it no longer requires use of the property but there is still some time before the lease comes to an end. For example, your business may have taken a five-year lease, but after two years you need to move. Unless the lease includes break clauses , you would have to continue to pay the rents and comply with the lease terms for the remaining three years of the lease term. By assigning the lease you can dispose or at the very least reduce that liability. 

If there is less than a year remaining of the lease to run, it may be more difficult to find someone who wants to take the lease for a short period of time, so in those circumstances it may be worth continuing to trade from the existing property until the lease comes to an end itself.

A few common examples of why you may wish to assign your lease are that:

• You may have agreed to sell your business and the structure of the transaction requires the lease to be assigned to the purchasers;
• Your business may not be trading as well as hoped and you are unable to keep up with rent payments or you may simply need smaller premises;
• You may find that the property is no longer situated in a convenient place and may wish therefore to relocate the business; or
• Your business may have grown faster than anticipated and requires bigger premises from which to trade.

Is a licence to assign needed?

Most landlords are primarily concerned with the income they earn from the properties they rent out. It is important to them that the tenants they rent to:

• Are able to pay the rent in full and on time;
• Keep the property in a good state of repair so that the property can be easily relet when the tenant leaves; and
• Behave in such a way as not to adversely affect the landlord’s ability to rent other properties it may own nearby.

It is for this reason that most landlords will seek to control who you can assign your lease to and prevent you from assigning your lease without your landlord’s consent.

Whether your landlord’s consent to an assignment (by way of a licence to assign) is required depends on the terms of the lease you are seeking to assign. Most leases will have some restrictions. It is only if the lease does not include any restriction on assignment, or includes restrictions but no requirement to obtain the landlord’s consent to an assignment, that no licence to assign will be required.

Although the detailed provisions can look intimidating, most assignment clauses simply require the landlord to agree that it believes the assignee to be able to meet its obligations and if it does so to formally consent to the assignment. The landlord is also usually required by statute not to unreasonably withhold or delay giving that consent. A licence to assign is the document used to evidence that the landlord has granted its consent to an assignment as required.

Note: if you feel your landlord is not co-operating, you should explore the options for tenants in our article on landlords unreasonably withholding consent .

You should ask for the landlord’s consent as soon as possible so as not to delay matters, as the landlord only has to deal with your request within a reasonable time and even then only once you have provided all the information the landlord needs in order to reach its decision on whether or not to give its consent. This may evidence of your assignee’s good standing such as bank and previous landlord references, and copies of audited accounts and bank statements.

If your proposed assignee is not of sufficient standing to satisfy the landlord consent may be granted if the assignee agrees to provide a guarantor for its liabilities or a rent deposit that can then be used if it fails to pay. What the landlord is permitted to insist on will depend on the specific wording of the lease and the specific set of circumstances.

You should also be aware that most landlords will insist that whatever the financial state of the assignee, you, as the outgoing tenant, will be required to guarantee the assignee’s obligations under the lease by what is called an authorised guarantee agreement. You should not make the error of assuming that by assigning your lease you can just walk away from any responsibility. The one thing that the law requires you to is to find someone who can pay the rent and comply with the lease terms. If you do not do this, then the landlord will most probably be able to recover any arrears from you.

If your lease expressly prohibits assignments without containing a requirement for consent to be given by the Landlord, then the starting point is that you cannot assign it at all. However, the landlord may still agree to an assignment taking place. This would still be documented by way of a licence to assign but in this case, the landlord would be under no obligation to grant its consent even if it would be reasonable to do so or to act promptly when considering your request to give that consent.

Actual assignments and virtual assignments

Most transfers of the ownership of a lease are carried out by an ‘actual assignment’ where the tenant assigns its interest in the lease to an assignee as explained above.

In a few cases you may seek to use a virtual assignment whereby you remain liable under the terms of the lease, but enter into a contract with a third-party transferring the economic benefits and burdens of the lease, without actually assigning the lease itself. These can be used when the lease contains overly restrictive assignment clauses. You could, for example, declare a trust or enter into a contract in favour of a third-party, effectively transferring the economic benefits and burdens of the lease to them. However, beware of clauses in the lease which prevent this sort of arrangement.

If a tenant is a company and the shares in that company are transferred to someone else, then the lease would remain unaffected and the tenant would still be the company. Although not strictly a virtual assignment this change of ownership can be a concern to some landlords and as a result, some leases include express provisions restricting changes in the shareholding of the tenant company. However, they are unusual and arguably onerous.

Registering an assignment

If the lease is registered at the Land Registry or has more than 7 years of its term remaining, and you are the assignee, you must register the assignment at the Land Registry. The Land Registry will then process the application and update the title register for the lease so that it is in your name.

It is very important that the assignee does indeed register the lease as, until it does, the assignment is not fully complete and legally you have not yet become the tenant. This has practical implications as, depending on the wording of the lease, you may not be able to serve a valid break notice until it is registered at the Land Registry. As registration can in some circumstances take a long time, you may find yourself unable to end the lease when you expected. If you forget to register you are unlikely to complete your registration in time to take the steps you need to take.

If you do not apply for registration within 2 months of the date of completion of the lease, the lease becomes void and can only be registered is the Land Registrar agrees to make an order extending the 2 month period.

In addition to registering the lease with the Land Registry most leases include an obligation to notify the landlord that an assignment has taken place and to send them a copy of the assignment document and pay them a fee for noting the transaction. Sometimes the lease sets out the specific notice fee, but more often than not the lease merely sets out a minimum fee. In theat case, you should ask the landlord to confirm the notice fee before completing the assignment.

Access legal support from just £145 per hour

Speak to our commercial property solicitors if you need practical legal advice on drafting, negotiating or terminating a lease agreement.

Get in touch

The effect of an assignment on a lease

In most cases, once a lease has been assigned, the assignee steps into the shoes of the tenant and all the rights and duties that the previous tenant had pass over to the new tenant. Occasionally there are rights in the lease which are personal to the original tenant. Again, this often affects the break clause. If the right to end the lease early is personal to the original tenant, you cannot do so if the lease is assigned. In such circumstances it may be better to sublet the property rather than assign the lease itself.

As most leases require the previous tenant to guarantee the performance of the new tenant, the assignment also has the effect of rearranging the liabilities for payment of the rent. Any previous guarantor under an authorised guarantee agreement will have been automatically released by the assignment and rent deposits may become repayable by the landlord.

Assignment v sub-letting

Is it preferable to assign a lease or sub-let it (retain your lease but grant a lease of the property for a slightly shorter term to another party)? The answer very much depends on your specific requirements and the particular circumstances.

Assigning the lease means that you no longer have any interest in the property. It is quite common that a tenant will still remain ‘on the hook’ for the lease obligations after an assignment, as the landlord will likely have insisted that they enter into an authorised guarantee agreement to guarantee the assignee complies with the lease. However, a landlord will not always insist on an authorised guarantee agreement and, even if one is in place, the obligations on it cease if/when the assignee assigns the lease itself to another party. Therefore, most tenants regard an assignment as the best option where they have no current use or interest in the property and do not think they will do at any point in the future.

As already noted you may have to keep the lease in your name if you wish to rely on any personal rights in the lease by granting a sub-lease. This will allow you to retain your interest in the lease, but it also means that you are still liable to pay the rents due under the lease and comply with all of the lease obligations. As the sub-tenant is likely to be in occupation of all or part of the property, you must manage them to ensure that the sub-tenant does not place you in breach of your duties under the lease.

Other reasons for sub-letting include:

• Using the sub-lease as an income stream.
• If you think you may wish to use the property later.
• If you want to dispose of only part of the property and keep the rest for your own use (most landlords are extremely unlikely to allow you to assign part only of your lease).

Transfer of the landlord’s interest in the building

Only a tenant can assign the lease. If the landlord wishes to dispose of its interest in the lease it does so by selling the freehold interest in the building to a new party who then automatically becomes the landlord. Subject to your receiving proper notification you are then required to pay the rent to the new building owner. If you intend to serve a notice (e.g. bringing the lease to an end or requesting a new lease) make sure that you serve the title on the legal owner otherwise you may find your notice to be of no effect. Beware the registration gap mentioned above. You may think that your apparent landlord is the legal owner but legally he may not be.

In addition to the points set out above that relate to the terms of the lease, there are other issues which can cause difficulties when trying to assign it. These include:

• In any circumstance where the landlord is required to consent to a transaction, make sure that all your rent and similar payments are up to date as often leases state that no consent will be given if payments are outstanding.
• The Minimum Energy Efficiency Standards (MEES) Regulations mean that you cannot assign your lease (or sublet it) if the Energy Performance Certificate (EPC) (most likely provided by your landlord when you took the lease) has expired. You cannot even market the property without providing an EPC.
• While they may not actually prevent an assignment, breaches of health and safety law or fire safety regulations or the rules around monitoring and managing asbestos may cause delays or scare your assignee away. If compliance with the rules is your responsibility under the lease, your landlord may refuse to consent to the assignment until you do so.

About our expert

Samantha Paxton

Areas of expertise, recent content.

If you have any questions about assigning a lease, or would like our expert commercial property solicitors to help you through the process, please get in touch.

Call us on 0800 689 1700 , or fill out the short form and we’ll contact you to discuss your situation and legal requirements. There’s no charge for your initial consultation, and no obligation to instruct us. We aim to respond to all messages received within 24 hours.

Your data will only be used by Harper James Solicitors. We will never sell your data and promise to keep it secure. You can find further information in our Privacy Policy .

Explore related resources

Our offices, a national law firm.

Our commercial lawyers are based in or close to major cities across the UK, providing expert legal advice to clients both locally and nationally.

We mainly work remotely, so we can work with you wherever you are. But we can arrange face-to-face meeting at our offices or a location of your choosing.

Head Office

Regional spaces, like what you’re reading, get new articles delivered to your inbox.

Join 8,153 entrepreneurs reading our latest news, guides and insights.

How can we help?

To access legal support from just £145 per hour arrange your no-obligation initial consultation to discuss your business requirements.

Make an enquiry

Watch for free

Webinar series: Legal essentials demystified

Unlock valuable insights for your business growth in our webinar series. Whether you’re an HR professional, business owner, or in-house counsel, our webinars explain essential topics and common challenges.

Register for upcoming events or watch previous recordings.

• Practical Law

Deed of assignment of lease

Practical law uk standard document 0-201-6259  (approx. 37 pages).

• Assignments, Variations, Surrenders and Termination - Land and Buildings

Commercial Leases: Key differences between an Assignment of Lease and a Sublease

Commercial Law

Oct 10 2022.

Similar to the trend seen overseas, working remotely has become a more common and standard practice, which has impacted the way some businesses now operate in New Zealand. Accordingly, when tenants under commercial leases are reviewing their leasing requirements they may decide that they no longer require the same area of premises. This may lead to a tenant transferring their rights under a commercial lease to another party by way of an assignment or sublease. In order to determine which arrangement is best for your business and circumstances, it is important to understand the differences between the two.

A sublease is where the tenant (commonly referred to as the sublandlord) transfers part or all of the tenancy under the sublandlord’s existing lease to a third party. It is important to note that the sublandlord retains an interest in the premises and there is no direct contract between the headlandlord and the subtenant. As a result, the sublandlord is still responsible for all lease obligations but the subtenant pays a contribution for the part of the premises that they sublease from the sublandlord. The subtenant is responsible to the sublandlord for the lease obligations under the sublease. This type of arrangement is particularly common when the sublandlord no longer requires all of the leased premises and wishes to recover some of the costs under the headlease. It is vital to ensure that the timeframe for the sublease arrangement does not extend beyond the term under the headlease. If you are considering subleasing part of your premises, the first step would be reviewing your headlease terms to see if there are any restrictions on the area or any parts within the premises that can or cannot be sublet.

An assignment of a lease involves the new tenant (commonly referred to as the assignee) agreeing to take on all of the existing tenant’s (commonly referred to as the assignor) lease obligations. The transfer of the interest is for the remaining duration of the lease. While the assignment of lease terminates the assignor’s right to possession, the assignor’s liability under the lease commonly continues to the expiry of the current lease term unless provisions are included within the Deed of Assignment of Lease or negotiated with the landlord to provide otherwise. This liability also extends to any guarantors provided. However, the standard ADLS Deed of Assignment of Lease includes an indemnity from the assignee in favour of the assignor against any claims the landlord may raise against the assignor or the assignor’s guarantors.

Once you have established which option is best suited for your business’s circumstances you need to ensure that the headlease allows for an assignment or a sublease to be granted and approach your landlord for their consent to the assignment or sublease.

If you want to assign or sublease your commercial lease or have queries about your lease, please contact us to find out which option is best for you.

Emily Merrill

John Mackay

You may also like ....

Understanding your obligations under the Consumer Guarantees Act 1993

Construction Contracts (Retention Money) Amendment Act 2023 – ‘The Highlights’

All is fair in Consumer Contracts and Trade – Changes to the Fair Trading Act 1986

Start typing and press enter to search.

Home » Commercial Property Law » As a commercial landlord, what say do I have over who my tenant sells their business to?

As a commercial landlord, what say do I have over who my tenant sells their business to?

23 May, 2012 | Wade Hansen

If you are the landlord of a commercial property, and your tenant is selling their business, you may want to know what say you have as to who the new tenant might be.  The transfer to a third party of the tenant’s rights to use the property is known as assignment.

The rights of landlords and tenants mainly depend on two things:

• the terms of any written lease signed by the parties and;
• part 4 of the Property Law Act 2007 (“PLA 2007”).

If you do not have a written lease, pursuant to section 210 of the PLA 2007, the tenant has no right to assign.  Further, if you do not have a written lease, either party may terminate the tenancy at will, giving only 20 working days notice. This is why we strongly recommend you have a lawyer draft a written lease to give you security.  A written lease locks the tenant in for an agreed period of time and gives the tenants the security of tenure for the term or period of the lease.

If you have an existing written lease, then a close examination of the wording surrounding any rights to assign the lease should be undertaken.  A lot of leases are based on the standard form Auckland District Law Society (“ADLS”) lease, which includes as a standard term the tenant’s right to assign the lease, subject to obtaining the landlord’s written consent to the assignment. However, the landlord shall give that consent if the following conditions are fulfilled:

a) the tenant proves to the satisfaction of the landlord that the assignee is respectable, responsible and has the financial resources to meet the commitments under the lease;

In order to satisfy this condition, it is reasonably standard practice that the landlord requests the following types of information from the proposed assignee:

• previous business experience relating to the business they will be conducting from the premises;
• details of their previous landlord(s) for the purpose of reference checks;

a list of assets and liabilities of the proposed assignee and/or any proposed guarantor of the assignee (see d) below).

b) all rent and other moneys owing under the lease have been paid and there is not any subsisting breach of any of the tenant’s covenants. An example of a subsisting breach may be if the tenant has made alterations to the premises without obtaining the landlord’s consent.  Then the landlord can require that the tenant reinstate the premises to the original state before the assignment will be consented to.

c) a deed of covenant in customary form is executed and delivered to the landlord; There is a standard ADLS deed of assignment (deed of assignment and deed of covenant can be used interchangeably) that is often used, which ties the assignee into the terms of the existing lease and more importantly, records that the current tenants is still liable under the deed of lease, should the assignee default.

d) if the assignment is to a company, then a guarantee from the principal shareholders of the company be executed and delivered to the landlord;

A guarantee is necessary if the proposed assignee is a company because if the company goes into receivership or is put into liquidation, then you want to secure another avenue whereby you can recoup any outstanding rental payments. Be mindful to ask for a list of assets of the guarantors in their personal names. If all of the guarantor’s assets are held in a family trust, you would be better to obtain a guarantee from the trust itself. Again, in the standard ADLS deed of assignment, the guarantors are a party to the document and if they sign this, they do not need to sign a separate guarantee document.

e) the tenant pays the landlords reasonable legal costs in respect of the proposed assignee.

The tenant is required to pay the landlord’s reasonable legal costs irrespective of whether or not the assignment proceeds.If your lease follows the standard form ADLS lease, you do have some say as to who takes on the assignment of the lease, but clause 45.1(k) states that you cannot unreasonably withhold your consent. If a reasonable landlord would be satisfied with the information the proposed assignee has provided, then you must grant consent.

How much control you have over who the new tenant is depends on the exact wording of your lease.  In rare cases, your lease may include the right for the tenant to assign the lease to someone else, but might not stipulate what conditions have to be met first.  The wording of leases does vary, and it is important that you understand exactly what rights your particular lease provides to you as the landlord.

Remember, even if as landlord you agree to the assignment of the lease, this does not always mean that the original tenant’s obligations under the lease are immediately terminated. You may still be able to fall back on original tenant and/or the original guarantor if assignee defaults. As always, it is determined by the wording of the lease and any other documents signed at the time of assignment.

If you have are in this situation we recommend that you consult your lawyer to understand exactly what your rights and obligations are under your current lease.  If you do not have a written lease in place with your current tenant, we strongly recommend that you instruct a lawyer to draft a lease recording the current terms of the lease immediately.

For assistance with a tenant assigning their lease or any commercial property matters, contact expert commercial property lawyer Wade Hansen  on  09 837 6885  or at  [email protected]

Is your tenant looking to assign their lease.

Ensure your investment is protecting through this transition – contact expert Commercial Property Lawyer, Wade Hansen today to set up an appointment.

+64 9 837 6885

About the author

Born and bred in the West, Wade has a keen interest in developing the community and assisting businesses grow to their full potential. His experience in Property & Commercial Law, along with his common sense and level headed business knowledge Read More »

Related articles

Selling your business or moving premises assigning a commercial lease sep 12, 2014 | read more », negotiating your commercial leases as a landlord jul 4, 2013 | read more », what is a deed of lease feb 1, 2018 | read more », wade's recent articles.

Before you build or renovate, read this – How changes to the Building Act impact consumers

22 February, 2012 | Wade Hansen

Ensuring positive business cash flow with effective terms of trade

7 March, 2012 | Wade Hansen

Business Law

What is a “Flats Plan”?

16 April, 2012 | Wade Hansen

Conveyancing / Buying & Selling Property

Commercial Leases

What is the liability of an outgoing tenant under an 'old' lease following assignment? Is a landlord obliged to pursue the current tenant for any arrears before pursuing a former tenant or guarantor to a former tenant?

Article summary, access this content for free with a 7 day trial of lexisnexis and benefit from:.

• Instant clarification on points of law
• Smart search
• Workflow tools
• 41 practice areas

** Trials are provided to all LexisNexis content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisNexis services please email customer service via our online form. Free trials are only available to individuals based in the UK, Ireland and selected UK overseas territories and Caribbean countries. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.

Get your quote today and take step closer to being able to benefit from:

• 36 practice areas

Get a LexisNexis quote

* denotes a required field

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Existing user? Sign-in CONTINUE READING GET A QUOTE

Related legal acts:

• Land Registration Act 2002 (2002 c 9)
• Landlord and Tenant (Covenants) Act 1995 (1995 c 30)
• Landlord and Tenant Act 1954 (1954 c 56)
• Law of Property Act 1925 (1925 c 20)

Key definition:

Tenant definition, what does tenant mean.

A person to whom a lease is granted.

Popular documents

What is the liability of an outgoing tenant under an 'old' lease following assignment is a landlord.

What is the liability of an outgoing tenant under an 'old' lease following assignment? Is a landlord obliged to pursue the current tenant for any arrears before pursuing a former tenant or guarantor to a former tenant?Obligations of an assignor tenant under an old leaseThe general rule is that where

Commercial rent arrears recovery (CRAR)

Commercial rent arrears recovery (CRAR)Right to recover rentThe commercial rent arrears recovery (CRAR) regime allows landlords to seize a tenant’s goods from the demised premises in order to recover unpaid rent. It replaced the old common law right to levy distress, and is more strictly regulated

Quick guide to landlord’s remedies for breach of lease

Quick guide to landlord’s remedies for breach of leaseThis Practice Note provides a summary of the remedies available to a landlord when faced with a tenant’s breach of lease, including forfeiture, service of a statutory demand, court proceedings to recover rent or damages, or for an injunction,

Claims for use and occupation, mesne profits, double rent and double value

Claims for use and occupation, mesne profits, double rent and double valueThis Practice Note provides guidance on claims for ‘use and occupation’ or mesne profits, and how and when double rent or double value can be claimed.Claims for use and occupationA claim for use and occupation is possible

0330 161 1234

• International Sales(Includes Middle East)
• Latin America and the Caribbean
• Netherlands
• New Zealand
• Philippines
• South Africa
• Switzerland
• United States

Popular Links

• Supplier Payment Terms
• Partner Alliance Programme

HELP & SUPPORT

• Legal Help and Support
• Tolley Tax Help and Support

LEGAL SOLUTIONS

• Compliance and Risk
• Forms and Documents
• Legal Drafting
• Legal Research
• Magazines and Journals
• News and Media Analysis
• Practice Management
• Privacy Policy
• Cookie Settings
• Terms & Conditions
• Data Protection Inquiry
• Protecting Human Rights: Our Modern Slavery Agreement

Residential Lease Agreement

Jump to Section

What is a residential lease agreement.

A residential lease agreement, sometimes referred to as a lease or rental agreement, is a legal contract a tenant and landlord sign when a tenant decides to rent a residential property. It outlines the terms and conditions of the tenancy, including the obligations and rights of the tenant and landlord. Tenants and landlords can use residential lease agreements for a variety of residential properties, including townhouses, duplexes, condos, houses, apartments, and more.

What Are the Landlord's and Tenant's Obligations in a Residential Lease Agreement?

The landlord's most important obligations in a residential lease agreement include:

• Giving the tenant access to the property
• Obligations to maintain or repair the structure of the property
• Allowing the tenant to enjoy the property undisturbed

On the other hand, the tenant's most important obligations in a lease agreement include:

• Paying rent on the agreed-upon date
• Not to cause damage to the property

What Does a Residential Lease Agreement Include?

The clauses included in a residential lease agreement vary depending on whether it is a standard residential lease agreement or a comprehensive lease agreement. A standard residential lease agreement typically includes the following:

• Name of the landlord and tenants: A residential lease agreement must specify the name and address of the tenant and the landlord. All tenants over the age of 18 must be named on the lease.
• Description of the property: The lease agreement should also specify the type of property being rented and its complete address, including the building or unit number, street name, town, state, and ZIP code. It should also specify any specific parking spots or storage areas as well as the areas that the tenant is not allowed to access.
• Term of the lease: This refers to the date the residential lease agreement is valid for, including the tenancy length, the start date, and the expiration date. Many yearly leases automatically convert to monthly leases once the original lease term ends.
• Rent amount and due date: The lease agreement must specify how much and when rent is due. It must indicate the full amount of rent due over the period of the entire lease and the amount due per month. It must also specify acceptable payment methods, whether the landlord charges a late payment fee, and grace period (if any).
• Security deposit terms: The lease agreement must also specify a security deposit clause, which includes the amount of security deposit collected, the date the security deposit was collected, interest rate, name and address of the bank where the security deposit is held, reasons deductions can be taken from the deposit, and the procedures for issuing a refund.
• Repair and maintenance policies: The agreement should also clearly explain the repair and maintenance policies, including the tenant's responsibility to maintain sanitary and clean premises and to pay for any damage they cause, a requirement that the tenant notifies the landlord about dangerous or defective conditions, and restrictions on tenant alterations and repairs.

In addition to the clauses in a standard residential lease agreement, a comprehensive residential lease agreement can specify whether or not the property is furnished, appoint a property manager who acts on behalf of the landlord, and state whether or not the tenant can operate a home business on the premises. This type of residential lease agreement also allows the landlord to include a pet fee or deposit and includes information about a guarantor or surety. A guarantor is someone, such as the tenant's parent or close friend, who agrees to pay the rent if the tenant defaults on rent.

Here's an article that shares a few other essential clauses in a residential lease agreement.

Lease Agreement Templates

Who can live in the property under a residential lease agreement.

Only the tenant and the people listed as occupants can live in the property. The difference between a tenant and an occupant is that a tenant is a person who signs a lease agreement, while an occupant is a person who lives in the property with a landlord's permission but doesn't have the same obligations and rights as a tenant. For example, an occupant is not legally required to contribute to a security deposit or pay rent but a tenant would.

Occupants can be both children and adults. Children adopted or born while the tenant lives in the property are automatically listed to lease as occupants. However, any state may limit the number of occupants/tenants in the property if that number violates safety or health regulations for housing. These regulations vary from one state to another.

Does a Residential Lease Agreement Have to be Notarized?

A residential lease agreement doesn't have to be notarized because a lease is usually considered a short-term contract. Lease terms are usually month to month, six months, or one year in length.

Some states consider leases that exceed one year to be long-term leases. In this case, the residential lease agreement has to be notarized. It doesn't usually cost much money to notarize a residential lease agreement.

If you want to learn more about how much you can expect to pay in notary fees, head to this article .

What Happens When a Residential Lease Agreement Ends?

If a tenant chooses a periodic term lease, the lease will automatically renew with the same terms and conditions as the initial lease, unless the landlord made some changes using the required notice period. Even after the initial lease period, notice from either the landlord or the tenant is required to end the lease agreement.

If a tenant chooses a fixed-term lease, however, the lease agreement between the tenant and landlord may continue if both parties agree. In some states, a fixed residential lease automatically becomes a periodic term residential lease. In other states, the fixed-term lease may become a "tenancy at sufferance" or a "tenancy at will" when it ends, which only lasts as long as the tenant and landlord want it to. This type of residential lease term usually occurs after an expired residential lease agreement and doesn't have as much legal protection as an unexpired residential lease.

If a tenant decides to terminate all rights under a fixed-term residential lease agreement as soon as it expires, they should serve notice before the end of the lease term, in accordance with their local requirements.

Image via Flickr by stu_spivack

What Happens If a Tenant Decides to End a Fixed-Term Tenancy?

If a tenant agreed to a fixed-term tenancy, they have to pay the rent during that period. If the tenant leaves the property before the term of the contract ends, they're still responsible to pay the rent for the entire length of the lease. However, if the landlord is able to re-rent the property before the end of the lease of the breaching tenant, they may no longer require the breaching tenant to pay rent. Landlords are not allowed to collect double rent, even if the previous tenant has left.

What Happens If a Tenant Violates a Term of the Residential Lease Agreement?

If the tenant breaches a term of the residential lease agreement, they're responsible for correcting it. This may involve paying money to repair any damages that the tenant or their guests may have caused. If they don't voluntarily pay to correct the breach, such as making a payment or repair, they can be evicted by the landlord or possibly face a lawsuit for damages sustained as a result of the breach.

If you are a landlord preparing to lease residential property, a residential lease agreement can provide important protections. When you are drafting a residential lease agreement, consult with a lawyer to make sure your document includes all necessary aspects.

Need help with a Residential Lease Agreement?

Meet some of our residential lease agreement lawyers.

Skilled in the details of complex corporate transactions, I have 15 years experience working with entrepreneurs and businesses to plan and grow for the future. Clients trust me because of the practical guided advice I provide. No deal is too small or complex for me to handle.

My career interests are to practice Transactional Corporate Law, including Business Start Up, and Mergers and Acquisitions, as well as Real Estate Law, Estate Planning Law, Tax, and Intellectual Property Law. I am currently licensed in Arizona, Pennsylvania and Utah, after having moved to Phoenix from Philadelphia in September 2019. I currently serve as General Counsel for a bioengineering company. I handle everything from their Mergers & Acquisitions, Private Placement Memorandums, and Corporate Structures to Intellectual Property Assignments, to Employment Law and Beach of Contract settlements. Responsibilities include writing and executing agreements, drafting court pleadings, court appearances, mergers and acquisitions, transactional documents, managing expert specialized legal counsel, legal research and anticipating unique legal issues that could impact the Company. Conducted an acquisition of an entire line of intellectual property from a competitor. In regards to other clients, I am primarily focused on transactional law for clients in a variety of industries including, but not limited to, real estate investment, property management, and e-commerce. Work is primarily centered around entity formation and corporate structure, corporate governance agreements, PPMs, opportunity zone tax incentives, and all kinds of business to business agreements. I have also recently gained experience with Estate Planning law, drafting numerous Estate Planning documents for people such as Wills, Powers of Attorney, Healthcare Directives, and Trusts. I was selected to the 2024 Super Lawyers Southwest Rising Stars list. Each year no more than 2.5% of the attorneys in Arizona and New Mexico are selected to the Rising Stars. I am looking to further gain legal experience in these fields of law as well as expand my legal experience assisting business start ups, mergers and acquisitions and also trademark registration and licensing.

My name is Ryenne Shaw and I help business owners build businesses that operate as assets instead of liabilities, increase in value over time and build wealth. My areas of expertise include corporate formation and business structure, contract law, employment/labor law, business risk and compliance and intellectual property. I also serve as outside general counsel to several businesses across various industries nationally. I spent most of my early legal career assisting C.E.O.s, General Counsel, and in-house legal counsel of both large and smaller corporations in minimizing liability, protecting business assets and maximizing profits. While working with many of these entities, I realized that smaller entities are often underserved. I saw that smaller business owners weren’t receiving the same level of legal support larger corporations relied upon to grow and sustain. I knew this was a major contributor to the ceiling that most small businesses hit before they’ve even scratched the surface of their potential. And I knew at that moment that all of this lack of knowledge and support was creating a huge wealth gap. After over ten years of legal experience, I started my law firm to provide the legal support small to mid-sized business owners and entrepreneurs need to grow and protect their brands, businesses, and assets. I have a passion for helping small to mid-sized businesses and startups grow into wealth-building assets by leveraging the same legal strategies large corporations have used for years to create real wealth. I enjoy connecting with my clients, learning about their visions and identifying ways to protect and maximize the reach, value and impact of their businesses. I am a strong legal writer with extensive litigation experience, including both federal and state (and administratively), which brings another element to every contract I prepare and the overall counsel and value I provide. Some of my recent projects include: - Negotiating & Drafting Commercial Lease Agreements - Drafting Trademark Licensing Agreements - Drafting Ambassador and Influencer Agreements - Drafting Collaboration Agreements - Drafting Service Agreements for service-providers, coaches and consultants - Drafting Master Service Agreements and SOWs - Drafting Terms of Service and Privacy Policies - Preparing policies and procedures for businesses in highly regulated industries - Drafting Employee Handbooks, Standard Operations and Procedures (SOPs) manuals, employment agreements - Creating Employer-employee infrastructure to ensure business compliance with employment and labor laws - Drafting Independent Contractor Agreements and Non-Disclosure/Non-Competition/Non-Solicitation Agreements - Conducting Federal Trademark Searches and filing trademark applications - Preparing Trademark Opinion Letters after conducting appropriate legal research - Drafting Letters of Opinion for Small Business Loans - Drafting and Responding to Cease and Desist Letters I service clients throughout the United States across a broad range of industries.

Erik has been a practicing attorney in Florida for over a decade. He specializes in employment and real estate contracts. He has represented clients big and small and can assist with any contract issue.

Travis counsels individuals and businesses on a broad range of complex topics. His practice centers on producing efficient, client-driven results. He concentrates his practice on real estate, construction, and general business matters with an emphasis on assisting clients both before and after problems occur by drafting contracts designed to best position clients to avoid disputes and litigating matters to a final resolution if problems emerge. Born and raised in Oklahoma, Travis is a triple graduate of the University of Oklahoma, having obtained his Bachelor of Arts, Master of Business Administration, and Juris Doctor degrees from OU. Prior to practicing law, Travis managed the finances and business operations of a successful construction supply company for several years. This insight into sophisticated business dealings, contractual issues, and strategic planning makes him uniquely qualified to handle a wide range of legal matters. Travis lives in Norman with his wife, Haley, dogs, Walter and Poppy, and cat, Ernest. Outside of the office, Travis enjoys playing golf and reading.

Domonick G.

I am a licensed attorney who specializes in business law, personal injury and contracts.

Williamson Health Law is an established and trusted law firm focused on representing hospitals, health plans, physician groups, physicians, physical therapy businesses, psychologists and other health care providers and businesses in all aspects of health law. including the Stark law, the Anti-Kickback Statute (“AKS”), the Health Insurance Portability and Accountability Act (“HIPAA”), regulatory compliance, Medicare and Blue Cross audits and overpayment appeals, payer departicipation and disaffiliation appeals, payer and provider disputes, reimbursement and billing, compliance plans, health care industry contracts and professional licensure. We represent clients throughout Michigan and the U.S. with certain federal matters such as federal regulatory analysis and Medicare audits.

Find the best lawyer for your project

Ending a residential lease agreement early.

I recently entered into a residential lease agreement for an apartment in my city. However, due to unforeseen circumstances, I am now in need of terminating my lease early. I am looking for advice on the best way to proceed in order to ensure that I am not held liable for any costs or fees associated with ending the lease early.

It is entirely the landlords decision as to whether to allow you to terminate early. If only because you want to move to another location and there’s nothing wrong with the unit. There are some possibilities of a substitution of a tenant that perhaps the landlord would agree to. Or if fourth of a part of your deposit, assuming you made one… There are a variety of ways to approach this, but ultimately is the choice of the landlord.

Landlord Tenant

Residential lease agreement for furnished units?

I recently moved into a furnished unit and signed a residential lease agreement. However, I am unsure if the agreement I signed covers any damage done to the furniture. I want to make sure that I am protected in the event of any damage to the furniture and that I am not liable for any repair or replacement costs.

Rosemary L.

It is common in a residential leases which is furnished that the tenant is responsible for any damage to furnishings. You might want to check if this clause is in the agreement, or whether there is a provision that states that included in the cost of the tenancy is insurance to reimburse the landlord (but payable by the tenant) for any losses to such personal property. If damages are the responsibility of the tenant, you might wish to discuss with the landlord whether you could replace any claim for damages with an insurance policy that would cover such losses.

Residential lease agreement and association rules?

I recently signed a residential lease agreement and have recently been made aware of association rules that may affect my rights and obligations as a tenant. I am concerned that these rules may conflict with the terms of my lease agreement and am seeking legal advice to ensure that I am aware of any potential issues that I may face.

If you would like to request me through a project, I’d be happy to review all documents and WA State law and provide you with advice. It will be important to know whether or not you were informed that you will have to comply with the HOA rules at the time you signed the lease—many leases state the necessity to comply with HOA CC&R’s and/or Bylaws and/or rules as well as WA State law.

Residential lease agreement for short-term rentals?

I am a homeowner in the state of California who is considering renting out my house on a short-term basis. I am interested in understanding the legal implications of such an arrangement, particularly in regards to the lease agreement that would need to be drafted. I would like to know what provisions I should include in the lease agreement to protect my interests and ensure that I am compliant with the law.

I think you need to post this as a CA question, not as a WA question. However, your first step is checking government and HOA rules, if any and make sure that this is allowed. You will need to change your insurance and possibly add another policy specifically for short term rentals. Let me know if I can ever be of help with WA State legal questions!

Real Estate

Security deposits in residential lease agreement?

I recently signed a residential lease agreement for an apartment. I was informed that I would need to pay a security deposit as part of the agreement. I am trying to understand what the security deposit covers and what happens to the deposit at the end of the lease agreement. I want to make sure I am fully aware of my rights and obligations regarding this security deposit.

A security deposit in a residential lease serves the following key purposes: 1. Property Protection: It covers damage or excessive wear and tear to the rental property during the tenant's stay. 2. Rent Arrears: It can be used to cover unpaid rent or other financial obligations if the tenant fails to pay rent. 3. Tenant Responsibility: It encourages tenants to take care of the property and fulfill lease obligations. 4. Landlord's Peace of Mind: It acts as insurance for landlords against potential losses. 5. Legal Compliance: Landlords must follow specific laws for holding and returning deposits. 6. Tenant Refund: Tenants get the deposit back if they meet lease terms, encouraging compliance. 7. Understanding deposit terms and local regulations is crucial to prevent disputes.

Real Estate lawyers by top cities

• Austin Real Estate Lawyers
• Boston Real Estate Lawyers
• Chicago Real Estate Lawyers
• Dallas Real Estate Lawyers
• Denver Real Estate Lawyers
• Houston Real Estate Lawyers
• Los Angeles Real Estate Lawyers
• New York Real Estate Lawyers
• Phoenix Real Estate Lawyers
• San Diego Real Estate Lawyers
• Tampa Real Estate Lawyers

Residential Lease Agreement lawyers by city

• Austin Residential Lease Agreement Lawyers
• Boston Residential Lease Agreement Lawyers
• Chicago Residential Lease Agreement Lawyers
• Dallas Residential Lease Agreement Lawyers
• Denver Residential Lease Agreement Lawyers
• Houston Residential Lease Agreement Lawyers
• Los Angeles Residential Lease Agreement Lawyers
• New York Residential Lease Agreement Lawyers
• Phoenix Residential Lease Agreement Lawyers
• San Diego Residential Lease Agreement Lawyers
• Tampa Residential Lease Agreement Lawyers

ContractsCounsel User

Termination of Lease Agreement Due to Unfulfilled Agreements by Landlords

Location: colorado, turnaround: less than a week, service: contract review, doc type: residential real estate lease, page count: 45, number of bids: 2, bid range: $750 - $1,000, residential real estate lease review, page count: 5, number of bids: 8, bid range: $150 - $585, related contracts.

• Addendum to Lease
• ALTA Statement
• Apartment Lease
• Apartment Rental Agreement
• Assignment of Lease
• Boundary Line Agreement
• Brokerage Agreement
• Building Contract
• Building Lease
• Business Office Lease Agreement

other helpful articles

• How much does it cost to draft a contract?
• Do Contract Lawyers Use Templates?
• How do Contract Lawyers charge?
• Business Contract Lawyers: How Can They Help?
• What to look for when hiring a lawyer

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Find lawyers and attorneys by city